Business confidence among small and medium-sized firms across Europe has declined by 14 points to 55.1, the sharpest fall ever recorded, according to the UEAPME SMR Business Climate Index, which was published today.
UEAPME, the European craft and SME's employers' organisation, which includes Irish business group ISME, surveyed 50,000 businesses for the study. It shows that the level of confidence has plummeted over the last 12 months.
For the same period in 2007, the Business Climated Index stood at 78.7 points and declined to 73.2 points for corresponding six-month period last year.
The survey also reveals that smaller businesses are still reluctant to lay off workers to cope with the downturn. Business expectations on investments and orders for the months to come are strikingly negative, although the service sector expects the decrease in orders to stop during this semester and foresees a relative improvement in personal services orders.
Significant disparities also emerged from employment data among different sectors, with twice as many companies in manufacturing and construction, recently affected by the car industry crisis and by the bursting housing bubble, planning to lay off workers compared to the services sector.
The only encouraging results of the survey came from business expectations on orders. Although all economic sectors reported negative figures, the business services sector expects the decrease to stop while the personal services sectors foresee a relative improvement in the months to come.
“The survey results confirm the downwards trend in business confidence since the beginning of 2008, with the steepest fall taking place in the last six months. A further decrease in confidence was easily predictable, but not by such a large extent. said Gerhard Huemer, director of the UEAPME Study Unit.
