Eurochambres Economic Survey 2011

EUROCHAMBRES
Economic Survey 2011
18th edition

EUROCHAMBRES
18th edition

Foreword . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Executive.Summary .. . . . . . . . . . . . . . . . . . . 5

Business.Confidence.&.Economic.Indicators. . . . . 9
Business Confidence 10
Total Turnover 11
Domestic Sales 12
Export Sales 13
Employment 14
Investment 15

Participating Regions 16

European.Regions .. . . . . . . . . . . . . . . . . . . .17

Focus.on.Business.Confidence:..
Euro Zone vs Non Euro Zone 30
Candidate Countries 31

Methodology 32
List of Chambers 33

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EUROCHAMBRES

foreword

Foreword
I am pleased to present the latest edition of EUROCHAM- Europe 2020 frames the EU’s competitiveness agenda for,
BRES’ annual Economic Survey EES 2011 comes at a crucial not just the year ahead, but the whole decade This plan
juncture, with Europe slowly emerging from the worst eco- must deliver where its predecessor, the Lisbon Strategy, fell
nomic crisis since World War II The survey results, based on short To do so, it is critically important that the business
over 70 000 responses from across Europe, indicate that, community has a say in its implementation, monitoring
while businesses can now see the light, they are not yet and evaluation
out of the tunnel
It is also vital that the strategic objectives of Europe 2020
EES 2011 underlines that policy makers should remain are supported by adequate financial resources The discus-
acutely aware of the business community’s cautious opti- sions on the EU budget and the forthcoming review of
mism, tempered by an ongoing sense of uncertainty about longer term financial perspectives will therefore be a lit-
the economic outlook The EU institutions and member mus test of the member states’ commitment to a coherent
states must thus redouble their efforts to ensure that fa- European approach to delivering jobs and growth Busi-
vourable conditions are in place for businesses of all sec- nesses from the Chamber network made their position
tors and sizes, that access to European and international clear in more than doubling the current level allocated to
markets is increased and that the necessary human, natu- competitiveness actions when setting out their ‘EU Dream
ral and financial resources are more readily available Budget’ during the October 2010 European Parliament of
Enterprises EUROCHAMBRES will be looking to EU leaders
EUROCHAMBRES is convinced that the response to these to demonstrate a similarly strong appetite for reform dur-
challenges must be coordinated at EU level Major Europe- ing the months ahead EES 2011 serves to remind all of us
an framework initiatives such as the Small Business Act, the of what is at stake
Single Market Act and the economic governance package
are potentially influential in this process, if strongly sup- Alessandro Barberis
ported and effectively implemented by member states EUROCHAMBRES PRESiDEnt

Business ConfidenCe expeCtations / read gdp growth

40 4
Real GDP Growth
35
30 3
Business Confidence
25
Business Confidence (Balance Figure)

20 2
15
Real GDP Growth (%)

10 1
5
0 0
-5
-10 -1
-15
-20 -2
-25
-30 -3
-35
-40 -4
-45
-50 -5
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009* 2010* 2011*

*European Commision (DGECFIN) Estimates

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EUROCHAMBRES

executive summary

Executive Summary
The EES 2011 indicates that businesses are confident that Greece, Spain and Croatia are the three countries where
the worst is behind them and that the economic situa- companies are least positive for 2011 In Greece, two-thirds
tion will improve next year Indeed, economic activity has of companies expect worsening business conditions for
picked up better than foreseen throughout 2010, which is the coming year, due to the austerity measures imposed
reflected in respondents overall mood of optimism for the by the national government Croatian businesses are not
year ahead sure that the crisis is over for them yet

Nonetheless, confidence is not yet back to pre-crisis levels, Business confidence decreased the most in Greece, Poland
and some uncertainty remains In 2011, more of the spe- and Slovenia; in Slovenia, it is not expected to improve
cial public economic crisis measures will come to an end markedly before 2012
(some schemes have actually terminated already), and EU
governments will be obliged to implement the austerity/ Total.turnover forecasts are clearly up, compared to last
fiscal consolidation measures foreseen in the framework of year’s The fragile signs of recovery that the European
the new European economic governance Meanwhile, ac- economy witnessed throughout 2010 are increasing busi-
cess to credit for businesses remains restricted nesses’ expectations

All economic indicators show a clear upturn in forecasts, total turnover
the biggest progression being noted in export sales ex-
pectations This is a logical result, considering that in 2010, 2011
thanks in part to a revived demand from emerging econo- 2010
mies, European exporters have regained confidence 2009
2008
Business. confidence continues its slow recovery Over- 2007
all, more than 30% of respondents think that next year’s 2006
business climate will improve, while more than half of the 2005
respondents consider that it will remain unchanged Ger- 2004
many and France are the main positive drivers among the 2003
five largest EU economies In Italy and the UK, forecasts are 2002
lower than last year, Spanish forecasts improve somewhat, 2001
but remain negative 2000
1999
Business ConfidenCe
-10 -5 0 5 10 15 20 25 30 35 40 45

2011
2010 In France, over 40% of businesses expect total turnover to
2009 increase further next year These positive expectations are
2008 fuelled by better domestic and export sales in the current
2007 year In Germany, the situation is similar, with export sales
2006 forecasts dominating While Italian businesses believe that
2005 recovery is underway, UK businesses are more cautious
2004 than the previous year Spanish businesses expect a mod-
2003 erate recovery in 2011
2002
2001 Sweden, Estonia and Poland register the most positive turn-
2000 over forecasts In both Estonia and Poland, about two-thirds
1999 of respondents anticipate higher turnover levels for 2011

-10 -5 0 5 10 15 20 25 30 35 40 45
The only country survey wide where the upswing is not re-
flected in positive forecasts is Greece Besides having the
Swedish, Estonian and Belgian companies are the most lowest balance figure for total turnover, it also registers the
confident for the coming year survey wide, while Slovak, steepest decrease
Latvian and German businesses witness the highest posi-
tive changeover

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EUROCHAMBRES

executive summary

On average, across the surveyed countries, domestic.sales German companies are very upbeat about their export
forecasts continue recovering slowly, yet participating prospects, and the rapid recovery of Germany is having a
countries demonstrate a wide range of differing trends positive influence on many of its neighbouring countries
Over half of French respondents expect higher export
domestiC sales sales levels next year In the UK, over half of the respond-
ents do not anticipate any change for 2011, and there is
2011 great hope that the UK economy will continue to benefit
2010 from the weakness of the pound About two-thirds of Ital-
2009 ian respondents consider that the situation will remain un-
2008 changed in 2011, leading to a weaker balance figure than
2007 last year, while prospects in Spain are much more positive
2006 for 2011
2005
2004 export sales
2003
2002 2011
2001 2010
2000 2009
1999 2008
2007
-10 -5 0 5 10 15 20 25 30 35 40 45
2006
2005
France is the most positive among the big member states 2004
In the UK and Spain, forecasts are slightly improving, yet 2003
the UK balance figure for 2011 remains negative In Italy, 2002
after a weak 2010, two-thirds of respondents believe that 2001
the situation will not change in 2011 2000
1999
Survey wide, Poland, Sweden and Denmark have the high-
-10 -5 0 5 10 15 20 25 30 35 40 45
est balance figures The three countries, overall, seem to
have been less affected by the economic crisis than other
EU member states Survey wide, Latvia, Denmark and Portugal have the high-
est export sales balance figures Hungary, Slovakia and
In Greece, Portugal and Romania, balance figures for do- Germany register the biggest year-on-year increase in ex-
mestic sales weaken the most compared to last year’s sur- pectations
vey Along the UK, Greece and Romania also have the low-
est forecasts for this indicator Businesses in Greece, Estonia and Romania are less con-
fident about their export sales prospects, as the balance
Having witnessed a positive development in 2010, Turk- figures decrease most markedly year-on-year
ish businesses remain upbeat about their domestic sales
expectations Domestic demand in Croatia throughout For both participating candidate countries, balance figures
2010 was weak, and companies are cautious in their fore- progress slightly, pointing towards better prospects in
casts for 2011 2011 in a somewhat better global environment

Based on the survey results, exports are the main driver of The employment balance is positive again, showing signs
Europe’s economic recovery, as all participating countries of recovery In 23 out of the 26 participating countries, bal-
show positive balance figures The export sales indicator is ance figures are increasing compared to last year’s results
also the one that has increased most year-on-year In total, However, this should not mask considerable differences
over 40% of respondents expect their exports to increase between the participating countries
next year

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EUROCHAMBRES

executive summary

employment

2011
2010 Latvian, Maltese and Polish businesses are most upbeat
2009 about their investment prospects for 2011, while those re-
2008 cording the biggest progression compared to last year can
2007 be found in Germany, Estonia and Latvia
2006
2005 Spain, Greece and Croatia are at the low end of investment
2004 prospects with negative balance figures The latter two, to-
2003 gether with Portugal, also witnessed the sharpest year-on-
2002 year regression in balance figures
2001
2000 Turkish businesses expect an increase in investment ex-
1999 penditure in 2011 Nevertheless, the result remains below
the long term average
-10 -5 0 5 10 15 20 25 30 35 40 45

investment
Employment forecasts in the larger European economies
are improving, although in Italy and Spain, balance figures 2011
remain negative In Germany, unemployment forecasts for 2010
2011 are much better than before the crisis The value is 2009
in fact the lowest since 1991 In both France and the UK, 2008
two-thirds of the respondents plan to maintain their cur- 2007
rent work force levels next year 2006
2005
Among EU member states, Belgian, Estonian and Latvian 2004
businesses register the most positive employment fore- 2003
casts Estonia, Germany and Sweden witness the biggest 2002
progression in balance figures Estonian businesses are up- 2001
beat about joining the euro zone next year and anticipate 2000
higher employment levels 1999

-10 -5 0 5 10 15 20 25 30 35 40 45
The three countries that have the most negative balance
figures are Greece, Spain and Slovenia, which are still feeling
the consequences of the economic crisis Business.confidence in the euro zone is progressing much
more markedly than in the non euro zone Still non euro
Greece also has the steepest drop in employment pros- zone countries are overall more optimistic than their euro
pects, together with Croatia and Portugal zone counterparts Also noteworthy is the fact that the
2011 business confidence forecast for the non euro zone
Turkey is the most positive country survey wide in terms of is worse than in all surveys before the 2008 credit crunch
employment prospects The Turkish labour market remains
strong, which translates into positive forecasts for the com- Businesses in Estonia are highly optimistic about the posi-
ing year tive effect of their country’s adhesion to the euro zone next
year
The investment climate is improving and the balance is re-
turning to a positive result Overall, half of the respondents Business confidence expectations in the candidate coun-
expect the situation to remain the same for 2011, while tries are more positive than in EU member states At the
about 30% of respondents anticipate higher investments same time, while optimism is growing in Turkey, Croatian
for the coming year companies’ business confidence forecasts remain low for
2011, so the gap between the two countries is widening
The two major euro zone countries, Germany and France,
have positive balance figures again Italian businesses are
very optimistic for 2011, as over half of the respondents
forecast an increase in investments, thanks to improved
domestic demand Investment expectations in Spain and
the UK are slowly rising, yet they remain negative

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EUROCHAMBRES

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EUROCHAMBRES

Business
confidence and
economic indicators

9
EUROCHAMBRES

Business confidence

Business Confidence
The light at the end of the tunnel is getting brighter

Business confidence is recovering from its low level in 2010, sequently, businesses are somewhat more optimistic, even
and the balance for 2011 is positive again. Overall, more than though over 40% do not anticipate any change next year In
30% think that next year’s business climate will improve, both the UK and Italy businesses are less confident in their
while more than half of the respondents consider that it will forecasts than last year In the UK, the lower forecasts are
be unchanged. not only the result of the economic crisis but also budget
cuts set out by the government Italian businesses 2010
expectations were not met, and they are more cautious in
The situation in the major European economies varies con- their 2011 forecasts Italy’s production structure has not yet
siderably Germany’s balance figure increases significantly overcome the difficulties that it is currently facing Spanish
compared to last year In Germany, the economy is return- forecasts are improving; nevertheless the balance remains
ing to solid ground Not only its export industry, but also in- negative Over half of Spanish respondents expect the situ-
vestment and consumer-oriented branches have improved ation to be unchanged next year The results continue to
significantly throughout 2010 and the trend is set to con- reflect the country’s precarious economic situation
tinue next year In France, after two unprecedentedly un-
favourable years, the situation stabilised in 2010, and con- Sweden, Belgium and Estonia demonstrate the highest lev-
els of business confidence The Belgian economy entered
into positive territory again in the second half of 2009 and
Business ConfidenCe expeCtations* for 2011 Compared to 2010 and 2009 fared rather well throughout 2010, leading to very upbeat
*BalanCe figures 2009 2010 2011 confidence forecasts for 2011 The main drivers for the up-
swing are export activities and private consumption In
-60 -40 -20 0 20 40 60 80 100 Estonia, businesses agree that the worst is over and reso-
Sweden lutely believe in a better 2011
Estonia
Belgium Slovakia, Latvia and Malta’s business confidence forecasts
Latvia for 2011 have increased most when compared to 2010
Malta
Turkey The three most negative countries are Greece, Croatia and
Bulgaria Spain Greek business confidence is the lowest among
Denmark surveyed countries Two-thirds of companies expect a
Cyprus further decrease in business development in 2011 The
Germany pessimism is evident across sectors, identical for manufac-
France turing and services In Croatia, the economic downturn is
Austria continuing, but at a slower pace This is partly the result of
Portugal somewhat improved foreign demand, which was to some
Slovakia extent generated by the slight economic recovery in most
Survey.average EU countries
EU.average
Czech Republic Greece, Poland and Slovenia are the three countries with
United Kingdom the largest year-on-year drop in business confidence In Po-
The Netherlands land, most companies do not expect any further improve-
Hungary ments in business confidence, while almost 30% expect
Italy the situation to deteriorate In Slovenia, business confi-
Slovenia dence has not yet returned, and two thirds of respondents
Romania believe that the situation will be unchanged next year
Finland
Poland In Turkey, for almost half of companies, the business cli-
Luxembourg mate was much better this year than anticipated last year
Spain And they believe that the trend will continue in 2011 The
Croatia main reasons for the positive mood are an improved do-
Greece mestic business environment, macroeconomic stability
and optimistic domestic sales expectations

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EUROCHAMBRES

total turnover

Total Turnover
Improving prospects

Businesses overall anticipate a higher turnover for the coming total turnover expeCtations* for 2011 Compared to 2010 and 2009
year. The fragile signs of recovery that the European economy *BalanCe figures 2009 2010 2011
witnessed throughout 2010 is spurring businesses expecta-
tions upwards. -40 -20 0 20 40 60 80 100
Sweden
Estonia
Among the big European economies, France is the one Poland
with the highest balance figure Total turnover in 2010 Denmark
went beyond last year’s expectations and over 40% of busi- Belgium
nesses expect it to increase further next year French fore- Latvia
casts are fuelled by both better domestic and export sales Cyprus
prospects, even if the country still needs a more significant Bulgaria
improvement of its labour market and a stabilisation of the Turkey
euro at a lower level The situation in Germany is similar, Portugal
where positive export forecasts dominate Italian compa- Slovakia
nies believe that recovery is underway and are positive for Slovenia
the coming year, with over 60% predicting a stabilisation Malta
of the situation The Italian manufacturing sector is more Austria
positive than the services one for 2011 In the UK as well, The Netherlands
the manufacturing sector is expecting better results next France
year than the services sector Overall, UK businesses are Survey.average
somewhat more cautious than the previous year, as the EU.average
balance figure for 2011 is lower Spanish companies expect Italy
a moderate recovery in 2011; here too, positive results in United Kingdom
industry exceed those of the services sector Luxembourg
Czech Republic
Sweden, Estonia and Poland provide the most positive Croatia
forecasts Swedish and Estonian businesses believe that Hungary
the positive trend from 2010 will continue next year, as Spain
nearly two-thirds expect higher turnovers in 2011 External Romania
and domestic demand gradually improved during 2010 in Finland
Poland (except in housing and transport), and two-thirds Germany
of respondents anticipate this to continue Greece

The Estonian, Bulgarian and Hungarian forecasts for 2011
increase most compared to last year In Bulgaria, respon- While the balance figure in Turkey is going up, Croatia’s
dents took advantage of the improving global economic balance figure is decreasing In Turkey, thanks to fiscal and
climate in 2010 and expect further progress in the coming monetary measures, domestic demand and economic
year Bulgarian industry, too, is more upbeat than services growth stabilised during 2010 and businesses expect the
positive trend to continue in 2011, thanks largely to higher
The only country where the upswing is not reflected in private consumption and investments and decreased in-
positive forecasts is Greece Besides having the lowest terest rates In Croatia, last year’s expectations were not
balance figure survey wide for the indicator, it is also the met, and businesses witnessed a significant reduction in
country witnessing the steepest decrease in total turnover consumption on the domestic market and a minor reco-
forecasts Portuguese companies are also much more cau- very of exports throughout 2010 Consequently, they are
tious in their forecasts for 2011 Nonetheless, half of the less positive about their total turnover forecasts for 2011
respondents expect total turnover to improve next year, than they were one year ago
with positive expectations being fuelled much more by
export prospects than domestic sales

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EUROCHAMBRES

domestic sales

Domestic Sales
Recovery is starting

On average, across the surveyed countries, the mood contin- nies do not expect their domestic sales levels to change
ues recovering slowly. Yet a wide range of differing trends in in 2011 The construction sector recovery remains particu-
the different countries can be observed. larly fragile For Italy, expectations for 2011 are worse than
last year’s; after a weak 2010, the balance is still on the pos-
itive side, yet two-thirds of respondents believe that the
Among the big member states, France is the most positive situation will not change in 2011
Last year, most French businesses were hoping to stabilise
their domestic sales for 2010 The results this year were Poland, Sweden and Denmark have the highest balance
better than expected, and this positive trend continues figures Even though Danish companies’ 2010 expecta-
for 2011 The situation in Germany is similar, as domestic tions were not met, they remain very optimistic, with near-
sales are recovering faster than expected one year ago ly two-thirds anticipating improved sales levels for 2011
The mood in the UK is improving slightly, yet the balance Polish households regained trust in the national economy
for 2011 remains negative, indicating a relatively weak do- during 2010, resulting in higher consumption, and compa-
mestic demand Expectations are improving somewhat in nies expect this trend to continue in 2011 In Sweden, hav-
Spain, starting from a low level Half of Spanish compa- ing fared quite strongly throughout the economic crisis,
the strong consumption climate is fostered by a decrease
in interest rates and in employment taxes The three coun-
domestiC sales expeCtations* for 2011 Compared to 2010 and 2009 tries were overall less affected by the economic crisis than
*BalanCe figures 2009 2010 2011 other EU member states

-60 -40 -20 0 20 40 60 80 100 Estonia, Latvia and France indicate the strongest year-on-
Poland year progress In both Estonia and Latvia, over half of the
Sweden respondents expect increased domestic sales for 2011
Denmark
Estonia In Greece, Portugal and Romania, the balance for domes-
Cyprus tic sales has weakened the most compared to last year
Belgium These countries were particularly affected by the crisis
Turkey and have now to adjust to structural economic problems
Latvia Greek businesses, having witnessed a bleak 2010, do not
France yet believe that a recovery is in sight, with over half of the
Bulgaria respondents foreseeing worse sales prospects for 2011 In
Austria Romania also, due to the programmed fiscal adjustment
Malta and weak labour market, prospects for the coming year are
Slovakia negative Portuguese businesses are much more cautious
Portugal than in previous surveys, partly no doubt because their
Luxembourg expectations for 2010 were not met, but also because the
Survey.average country’s economic situation remains fragile
EU.average
Croatia Having witnessed a positive development in 2010, Turkish
Slovenia businesses remain upbeat about domestic sales expecta-
Italy tions Domestic demand in Croatia during 2010 was weak,
Czech Republic with borrowing levels low, wages falling and unemploy-
Spain ment rising This context is reflected by the fact that com-
Finland panies are also cautious in their forecasts for 2011
Hungary
Romania
United Kingdom
Greece

12
EUROCHAMBRES

export sales

Export Sales
High hopes for exports

Survey results suggest that exports are the main drivers of export sales expeCtations* for 2011 Compared to 2010 and 2009
the economic recovery, as all participating countries show *BalanCe figures 2009 2010 2011
positive balance figures. The overall balance is higher than
the 2006 result, yet it remains below the buoyant 2007 and -40 -20 0 20 40 60 80 100
2008 forecasts. In total over 40% of respondents expect their Latvia
exports to increase next year. Nonetheless, exports are not yet Portugal
back to full speed, due to uncertainty about global economic Denmark
development, linked to the fact that stimulus packages are Austria
coming to an end throughout the world. Slovenia
Malta
France
Thanks to an upturn in world trade, European exporters Sweden
have witnessed a favourable environment throughout Germany
2010, especially in the emerging markets German com- Belgium
panies are very upbeat about their export prospects The Poland
German focus on investment goods is particularly advan- Bulgaria
tageous in the current upswing The rapid recovery of Ger- Spain
many is having a positive influence on many of its neigh- Cyprus
bouring countries, the French economy in particular Over Estonia
half of French respondents expect higher export sales EU.average
levels next year, leading to a considerable increase of the Survey.average
balance figure A potential upswing in Spain would stem Hungary
more from exports than from domestic sales, as shown by Turkey
the noticeable increase in export prospects for 2011 There Luxembourg
is great hope that the UK economy will continue to ben- Slovakia
efit from the weakness of the pound, and that an export The Netherlands
led recovery is still a reality Based on this, UK businesses Italy
are more optimistic than last year and the balance, unlike Greece
last year, is positive Italian businesses have also benefited Czech Republic
from the positive global environment in 2010, and about United Kingdom
two-thirds anticipate that this trend will continue in the Croatia
coming year, while about one quarter expect further in- Romania
creases in export sales Finland

Survey wide, Latvia, Denmark and Portugal have the high-
est balance figures Latvian exporters experienced a good Slovakia are also benefiting from Germany’s growth In the
2010 and three-quarters of respondents expect their case of Slovakia, companies expect the export climate to
exports to grow further next year Danish exports were improve further in 2011
boosted in 2010 by the favourable economic development
of its main export markets, notably Germany and Sweden, The countries witnessing the largest decrease in export
and two-thirds of respondents expect next year’s climate forecasts are Greece, Romania and Italy Greek exporters
to improve further The high expectations of Portuguese adopt a much more cautious attitude after two weak years
exporters were not met this year, yet they remain optimis- Romanian companies are very cautious in their export
tic about 2011 export sales forecasts for 2011, despite the introduction of new Roma-
nian products and services to international markets
Hungary, Slovakia and Germany show the biggest increase
in balance figures compared to last year In Hungary, ex- Both Croatia and Turkey anticipate a somewhat better glo-
port optimism has returned; the balance figure increase is bal environment in 2011, as the balance figures for both
the highest in the survey This result is in stark contrast to countries have increased slightly In Turkey, the stronger
last year, when Hungarian respondents were the most pes- national currency is affecting export sales and there are
simistic Expanding export demand is contributing strong- fears that a further appreciation will have a negative effect
ly to the country’s economic recovery Both Hungary and in 2011
13
EUROCHAMBRES

employment

Employment
Workforce expected to grow again

Employment forecasts are positive again, even though ex- year, as over two-thirds believe that they have enough ca-
pectations remain well below those expressed in 2007. Busi- pacity within their existing workforce to respond to any
nesses in 23 of 26 countries anticipate an improvement in the increase in demand Even though they have improved, the
employment situation overall for 2011, while only 3 countries balance figures for Italy and Spain remain negative The
anticipate a worsening. Spanish recovery is proceeding at a sluggish pace, with a
substantial increase in unemployment In Italy, employ-
ment is forecast to increase slightly in 2011, while unem-
The large European economies witness improved employ- ployment is expected to remain stable
ment forecasts, yet to greatly varying degrees Thanks to
strong growth in 2010 and labour market reforms, the The three member states with the most positive employ-
2011 unemployment forecast in Germany is much better ment forecast for 2011 are Belgium, Estonia and Latvia In
than before the crisis, and is actually the lowest value since Estonia, 37% of businesses in the manufacturing sector
1991 In France, unemployment started to ease in 2010 and and 51% of services providers believe that their workforce
the employment situation is stabilising Over two-thirds of will increase The positive expectations are motivated by
French respondents anticipate that they will maintain their the current sound fiscal policies introduced by the Esto-
current workforce level next year In the UK, employment nian government and by euro zone accession in 2011 In
prospects are increasing only marginally compared to last Belgium, the forecast for 2011 builds on a positive result
in 2010, when 34% of businesses hired new employees,
almost twice as many as those scaling back The positive
employment expeCtations* for 2011 Compared to 2010 and 2009 attitude in Latvia is to be attributed more to the relief that
*BalanCe figures 2009 2010 2011 the situation will not worsen further than to expectations
of a real upswing in employment levels in 2011
-40 -30 -20 -10 0 10 20 30 40 50 60
Turkey The three countries with the most positive employment
Latvia year-on-year increase are Estonia, Germany and Sweden
Belgium Employment recovered slightly in Sweden in 2010, and
Estonia given the very positive outlook for 2011, businesses pre-
Sweden dict a more rapid increase in employment next year
Malta
Denmark The three countries with the lowest balance figures are
Cyprus Greece, Slovenia and Spain Slovenian businesses express a
Poland very cautious attitude, taking into account the unfavoura-
Bulgaria ble economic conditions Greek businesses do not believe
Austria that they hit the bottom in 2010 in terms of employment
France losses The negative balance for 2011 indicates that
The Netherlands
Luxembourg Greece, Croatia and Portugal are the countries with the
Slovakia most negative year-on-year trend While Portuguese com-
Germany panies were exceedingly confident last year in their fore-
Survey.average casts for 2010, the reality throughout the year has been far
EU.average less positive, and almost 70% of respondents now antici-
United Kingdom pate the situation to remain the same in 2011 In Croatia,
Portugal unemployment continued to rise in 2010, while the
Hungary number of employed people dropped to the lowest level
Finland for four years The fact that over two-thirds of businesses
Croatia anticipate retaining their existing workforce next year can
Italy thus be interpreted positively
Czech Republic
Romania The Turkish labour market remains strong and its overall
Spain performance is quite positive Results show that Turkish
Slovenia companies witnessed higher employment levels in 2010
Greece than anticipated the year before, and they foresee that the
14 trend will continue in 2011

EUROCHAMBRES

investment

Investment
Businesses are ready to invest again

The investment climate is improving and the balance has investment expeCtations* for 2011 Compared to 2010 and 2009
returned to a positive result. In 2010, the investment climate *BalanCe figures 2009 2010 2011
was cautious, as anticipated at the end of last year, with over
half of respondents indicating constant levels. Overall, half of -40 -20 0 20 40 60 80 100
the respondents also forecast constant investment levels for Latvia
next year, while about 30% anticipate higher investments. Malta
Compared to the 2009 and 2010 forecasts, this clearly points Poland
to 2011 as a decisive year in Europe’s economic recovery. Italy
Estonia
Turkey
The two major euro zone economies, Gemany and France, Belgium
have positive balance figures again In Germany, the in- Sweden
crease can be explained thanks to high foreign and do- Slovakia
mestic demand for German products and companies’ con- Bulgaria
fidence in their increased competiveness In France, the Denmark
gradual investment recovery that started in 2010 is set to Slovenia
continue next year, with over half of the respondents an- Cyprus
ticipating constant investment levels, and more than one- Germany
quarter forecasting an increase The fact that financing Hungary
conditions in France have eased due to the fall in interest Survey.average
rates is highlighted as a key factor EU.average
France
Italian businesses are very optimistic for 2011, as over half Luxembourg
of the respondents forecast an increase in investments, Portugal
thanks to improved domestic demand Investment ex- The Netherlands
pectations in Spain and the UK are slowly progressing, yet Romania
they remain negative In Spain, bank lending conditions Finland
continue to be tight and uncertainties about the sustain- Austria
ability of the recovery persist In the UK, there is increas- United Kingdom
ing evidence that there is enough spare capacity in the UK Czech Republic
economy to respond to an increase in demand This would Spain
explain the “wait and see” attitude of many UK businesses Croatia
towards investments Greece

Investment forecast balances are most positive in Latvia,
Malta and Poland In Poland, companies are increasing their Investment levels are mostly influenced by domestic and
production capacities in response to growing demand This foreign demand, revenues and the availability and price of
relates however more to exporters It is noteworthy that capital In Croatia, none of these factors is positively influ-
even investors with a good financial standing prefer to en- encing investment forecasts In Greece, the balance for in-
gage their own resources rather than to take a bank loan vestment has significantly decreased compared to that of
In Latvia, the situation is due to a positive trend in exports, 2010, mainly due to the current economic situation
a gradual increase in private consumption, improved busi-
ness confidence and stabilisation of the labour market In Turkey, almost half of the Turkish businesses expect an
increase in investment levels for 2011 Businesses’ ten-
The biggest positive year-on-year change is in Germany, dency to invest is growing, but still below its long-term
Estonia and Latvia average

The three countries with the lowest balance figures are
Spain, Greece, and Croatia The latter two are also regress-
ing most, together with Portugal

15
EUROCHAMBRES

list of regions

Participating Regions
95. participating. regions. in. EURO- •. GERMANY.(DE) •. PORTUGAL.(PT)
CHAMBRES.Economic.Survey.2011 Baden-Württemberg (DE1)
•. ROMANIA.(RO)
Bayern (DE2)
Macroregiunea Unu (RO1)
Each region has its own code (be- Berlin (DE3)
Macroregiunea Doi (RO2)
tween brackets), which is used for Brandenburg (DE4)
Macroregiunea Trei (RO3)
identification in the maps located in Bremen (DE5)
Macroregiunea Patru (RO4)
the part “European Regions” Hamburg (DE6)
Hessen (DE7) •. SLOVAKIA.(SK)
NUTS1 regional classification is used Mecklenburg-Vorpommern (DE8)
•. SLOVENIA.(SI)
for most countries with the exception Niedersachsen (DE9)
of Spain, which uses NUTS2 Some Nordrhein-Westfalen (DEA) •. SPAIN.(ES)
participating countries are treated as Rheinland-Pfalz (DEB) Galicia (ES11)
one single region Saarland (DEC) Asturias (ES12)
Sachsen (DED) Cantabria (ES13)
Sachsen-Anhalt (DEE) País Vasco (ES21)
•. AUSTRIA.(AT) Schleswig-Holstein (DEF) Navarra (ES22)
East (AT1) Thüringen (DEG) La Rioja (ES23)
South (AT2) Aragón (ES24)
•. GREECE.(GR)
West (AT3) Madrid (ES3)
•. HUNGARY.(HU) Castilla y León (ES41)
•. BELGIUM.(BE)
Közép-Magyarország (HU1) Castilla-La Mancha (ES42)
Brussels Capital (BE1)
Dunántúl (HU2) Extremadura (ES43)
Flanders (BE2)
Alföld és Észak (HU3) Cataluña (ES51)
Wallonia (BE3)
C Valenciana (ES52)
•. IRELAND.(IE)
•. BULGARIA.(BG) Baleares (ES53)
•. ITALY.(IT) Andalucía (ES61)
•. CROATIA.(HR)
Nord Ovest (ITC) Murcia (ES62)
•. CYPRUS.(CY) Nord Est (ITD) Ceuta (ES63)
Centro (ITE) Canarias (ES7)
•. CZECH.REPUBLIC.(CZ)
Sud (ITF)
•. SWEDEN.(SE)
•. DENMARK.(DK) Isole (ITG)
Östra Sverige (SE1)
•. ESTONIA.(EE) •. LATVIA.(LV) Södra Sverige (SE2)
Norra Sverige (SE3)
•. FINLAND.(FI) •. LITHUANIA.(LT)
•. TURKEY.(TR)
•. FRANCE.(FR) •. LUXEMBOURG.(LU)
Île-de-France (FR1) •. UNITED.KINGDOM.(UK)
•. MALTA.(MT)
Bassin parisien (FR2) North East (UKC)
Nord (FR3) •. THE.NETHERLANDS.(NL) North West (UKD)
Est (FR4) North (NL1) Yorkshire & Humberside (UKE)
Ouest (FR5) East (NL2) East Midlands (UKF)
Sud Ouest (FR6) West (NL3) West Midlands (UKG)
Centre Est (FR7) South (NL4) East of England (UKH)
Méditerranée (FR8) London (UKI)
•. POLAND.(PL)
South East (UKJ)
Centralny
South West (UKK)
Poludniowy
Wales (UKL)
Wschodni
Scotland (UKM)
Pólnocno-Zachodni
Northern Ireland (UKN)
Poludniowo-Zachodni
Pólnocny

16
EUROCHAMBRES

european
regions

17
EUROCHAMBRES

Business Confidence for 2011

eU coUntry %
SE Sweden 72 9 21 5 56
EE Estonia 59 3 33 3 74
LV Latvia 58 0 31 0 11 0
BE Belgium 56 6 34 3 91
BG Bulgaria 53 4 27 9 18 7
TR Turkey 51 0 37 0 12 0
MT Malta 49 0 43 0 80
PT Portugal 48 9 22 3 28 8
DK Denmark 46 0 40 4 13 5
CY Cyprus 44 0 43 7 12 3
FR France 41 7 43 5 14 8
UK United Kingdom 39 8 30 4 30 0
AT Austria 38 2 46 1 15 7
RO Romania 36 4 31 2 32 4
CZ Czech Republic 35 8 38 8 25 3
SK Slovakia 35 1 47 4 17 5
. Survey.average. 34 3. 46 7. 18 9
. EU.average. 33 7. 47 2. 19 1
DE Germany 33 0 56 0 11 0
PL Poland 27 7 43 6 28 7
HU Hungary 27 5 52 3 20 2
IT Italy 23 8 59 6 16 6
HR Croatia 22 7 37 8 39 5
LU Luxembourg 20 2 57 2 22 6
SI Slovenia 19 6 66 7 13 7
NL The Netherlands 19 0 71 0 10 0
ES Spain 17 0 52 0 31 0
GR Greece 72 28 4 64 4

18
EUROCHAMBRES

Business confidence for 2011

55 to 100%
40 to 55%
20 to 40%
0 to 20%
negative percentage
no data available

Net balance figures obtained by
deducting the percentage of com-
panies giving a negative answer
from the percentage of companies
responding positively

19
EUROCHAMBRES

Total Turnover for 2011

eU coUntry %
PL Poland 66 7 23 3 10 0
SE Sweden 65 7 26 8 75
EE Estonia 64 6 28 5 69
LV Latvia 63 0 25 0 12 0
DK Denmark 62 8 29 8 74
BE Belgium 61 2 31 1 78
CY Cyprus 56 2 30 6 13 2
SK Slovakia 55 7 25 8 18 5
PT Portugal 55 4 26 6 18 0
BG Bulgaria 53 2 36 0 10 8
AT Austria 51 7 33 3 15 0
SI Slovenia 50 6 35 9 13 5
MT Malta 47 0 43 0 10 0
TR Turkey 47 0 46 0 70
FR France 46 2 42 3 11 5
NL The Netherlands 44 0 47 0 90
. Survey.average. 43 5. 41 3. 15 2
. EU.average. 43 4. 41 1. 15 6
HR Croatia 39 4 36 4 24 2
RO Romania 34 1 35 8 30 1
HU Hungary 32 2 45 4 22 4
IT Italy 31 1 61 6 74
ES Spain 30 0 47 0 23 0
GR Greece 15 4 33 4 51 2
DE Germany 00 00 00

20
EUROCHAMBRES

total turnover for 2011

55 to 100%
40 to 55%
20 to 40%
0 to 20%
negative percentage
no data available


21
EUROCHAMBRES

Domestic Sales for 2011

eU coUntry %
PL Poland 63 2 26 5 10 4
SE Sweden 59 3 33 6 71
DK Denmark 58 9 33 4 76
CY Cyprus 57 3 29 9 12 8
EE Estonia 54 4 39 2 64
LV Latvia 52 0 36 0 12 0
BE Belgium 51 9 38 0 10 1
FR France 50 0 38 8 11 2
TR Turkey 48 0 45 0 70
AT Austria 47 8 37 5 14 6
BG Bulgaria 46 6 41 8 11 6
PT Portugal 44 0 35 1 20 9
SK Slovakia 43 3 37 1 19 6
MT Malta 41 0 49 0 10 0
. Survey.average. 36 9. 44 8. 18 4
. EU.average. 36 3. 44 8. 18 9
HR Croatia 35 3 37 4 27 3
RO Romania 32 3 32 6 35 1
SI Slovenia 26 9 53 2 19 9
ES Spain 26 0 50 0 24 0
HU Hungary 23 9 51 4 24 7
IT Italy 19 9 66 7 13 4
GR Greece 12 7 31 9 55 4
DE Germany
NL The Netherlands

22
EUROCHAMBRES

domestic sales for 2011

55 to 100%
40 to 55%
20 to 40%
0 to 20%
negative percentage
no data available


23
EUROCHAMBRES

Export Sales for 2011

eU coUntry %
LV Latvia 74 0 22 0 40
DK Denmark 63 5 30 0 64
PT Portugal 62 8 31 9 53
AT Austria 55 7 34 3 99
SI Slovenia 53 3 35 8 10 9
FR France 52 3 35 8 11 9
MT Malta 50 0 42 0 80
SE Sweden 49 0 41 3 97
BG Bulgaria 47 5 40 5 12 1
SK Slovakia 47 4 30 9 21 7
PL Poland 45 2 46 5 83
CY Cyprus 45 1 44 6 10 3
ES Spain 45 0 45 0 10 0
DE Germany 44 0 49 0 70
BE Belgium 43 9 49 2 69
. EU.average. 41 0. 48 1. 10 8
HU Hungary 41 0 46 6 12 4
. Survey.average. 40 8. 48 4. 10 8
GR Greece 40 6 36 3 23 1
EE Estonia 38 5 55 5 60
TR Turkey 36 0 55 0 90
NL The Netherlands 31 0 61 0 80
RO Romania 29 5 44 5 26 1
IT Italy 26 9 65 3 78
HR Croatia 25 7 53 8 20 4

24
EUROCHAMBRES

export sales for 2011

55 to 100%
40 to 55%
20 to 40%
0 to 20%
negative percentage
no data available


25
EUROCHAMBRES

Employment for 2011

eU coUntry %
TR Turkey 45 0 48 0 70
LV Latvia 37 0 55 0 80
SE Sweden 36 8 52 9 10 3
BE Belgium 36 3 55 7 80
PL Poland 35 1 49 9 15 0
CY Cyprus 33 4 55 1 11 5
DK Denmark 32 8 58 7 85
EE Estonia 32 6 62 0 53
MT Malta 31 0 64 0 50
AT Austria 30 2 53 3 16 5
BG Bulgaria 28 1 61 5 10 5
SK Slovakia 25 8 56 7 17 5
FR France 23 1 67 2 96
RO Romania 21 3 50 2 28 5
. Survey.average. 20 2. 66 5. 13 4
. EU.average. 19 2. 67 2. 13 6
DE Germany 19 0 69 0 12 0
HU Hungary 18 1 64 6 17 3
PT Portugal 18 0 69 1 12 9
SI Slovenia 15 9 55 4 28 7
HR Croatia 14 9 68 4 16 6
ES Spain 14 0 62 0 24 0
GR Greece 66 56 1 37 3
IT Italy 41 86 2 97

26
EUROCHAMBRES

employment for 2011

55 to 100%
40 to 55%
20 to 40%
0 to 20%
negative percentage
no data available


27
EUROCHAMBRES

Investment for 2011

eU coUntry %
IT Italy 55 4 21 1 23 5
LV Latvia 47 0 43 0 10 0
PO Poland 46 7 40 1 13 2
SK Slovakia 44 3 35 1 20 6
MT Malta 42 0 50 0 80
TR Turkey 42 0 46 0 12 0
EE Estonia 40 1 50 3 96
BE Belgium 40 1 48 4 11 5
BG Bulgaria 37 2 46 8 16 0
SE Sweden 37 2 50 2 12 6
SI Slovenia 36 3 42 0 21 7
CY Cyprus 31 4 51 6 17 0
DK Denmark 31 4 56 0 12 6
RO Romania 30 2 42 1 27 7
. Survey.average. 30 2. 50 5. 19 4
. EU.average. 29 8. 50 7. 19 6
HU Hungary 29 6 52 8 17 6
DE Germany 29 0 56 0 15 0
FR France 27 2 55 0 17 9
PT Portugal 25 7 55 7 18 6
AT Austria 21 6 56 2 22 2
HR Croatia 20 8 41 1 38 1
ES Spain 17 0 54 0 29 0
GR Greece 13 5 48 6 37 9

28
EUROCHAMBRES

investment for 2011

55 to 100%
40 to 55%
20 to 40%
0 to 20%
negative percentage
no data available


29
EUROCHAMBRES

focus on Business confidence

Focus on Business Confidence
euro Zone vs non euro Zone
31.0% 42.0%

Business confidence for 2011 is growing; more than 40% of
17.2% 25.1%
non euro zone companies are positive about the develop-
euro Zone non euro Zone ment of business confidence, as are one-third of the euro
average average zone respondents Only 17% of the companies from the
euro zone and 25% of those from the non euro zone fore-
51.8% 32.8% cast a decrease in business confidence for 2011

The balance for the non euro zone is similar to that forecast
euro Zone last year, while in the euro zone the balance has increased
significantly Business confidence is traditionally higher in
Belgium non euro zone countries This gap has been decreasing sig-
Malta nificantly over the last two years after slight declines in the
Portugal years before the crisis
Cyprus
France In the non euro zone, the 2011 expectations for business
Austria confidence are worse than in all surveys before the credit
Slovakia crunch in 2008 On the other hand, the Euro area results are
Germany more optimistic expectations than expressed in forecasts
Euro.zone.average for 2002, 2003, 2005 and 2006
Italy
Luxembourg The most positive countries in the euro zone are Belgium,
Slovenia Malta and Cyprus The most optimistic countries concern-
The Netherlands ing business confidence from the non euro zone are Swe-
Spain den, Latvia and Estonia Estonia, which is about to join euro
Greece zone in 2011, is especially optimistic 60% of Estonian com-
0% 20% 40% 60% 80% 100% panies forecast an increase in business confidence

Companies from only three euro zone countries indicate
non euro Zone low levels of business confidence in 2011 In Greece and
Spain, balance forecasts are negative, whereas in Lux-
Sweden embourg the share of respondents expecting a decrease
Estonia is only 2% points higher than those who forecast an in-
Latvia crease In the countries of the non euro zone, the majority
Bulgaria of companies is optimistic about business confidence in
Denmark 2011, apart from Poland where companies expecting an
Non.euro.zone.average increase/decrease are more or less in equilibrium
United Kingdom
Romania Expectations among companies in the major economies of
Czech Republic the euro zone vary Respondents from France and Germa-
Poland ny are more positive in their forecasts than in recent years,
Hungary while companies in the United Kingdom, Italy and Spain
0% 20% 40% 60% 80% 100% are far more pessimistic than in 2010

Favourable Constant Unfavourable

30
EUROCHAMBRES

focus on Business confidence

Candidate Countries
33.7% 48.4%

Business confidence expectations in the candidate countries
19.1% 14.6%
are more positive than in EU member states At the same
time, while optimism is growing in Turkey, Croatian compa- eu member accession
nies’ business confidence remains low for 2011 This means states Candidates
that the gap between Turkey and Croatia is widening
47.1% 37.1%
Almost half of the companies in the candidate countries
expect a positive business development in 2011, while the
figure decreases to one-third of respondents in the Euro- eu memBer states
pean Union In Turkey, 51% of the respondents anticipate
improved business conditions in 2011 Sweden
Estonia
The Turkish recovery was fuelled by an increase in house- Latvia
hold consumption and private investment As a result, Tur- Belgium
key is back on track after recession Like all other emerging Bulgaria
market economies, the Turkish economy was tested by the Malta
global turmoil and has proven its strength and resilience Portugal
However, Turkey not only recovered quickly from the crisis Denmark
but was also able to sustain a significantly higher rate of Cyprus
growth All signs now indicate that the economy has re- France
bounded quickly and is headed towards renewed growth United Kingdom
and an improving fiscal balance Austria
Romania
The resilience of the Turkish corporate and financial sec- Czech Republic
tors has turned out to be a considerable asset in manag- Slovakia
ing the recent crisis In particular, a better than expected EU.average
recovery in economic activity, upgrades from credit rating Germany
agencies, easing political uncertainty with the comple- Poland
tion of a referendum process, and the signal given by the Hungary
updated Medium Term Program that the fiscal discipline Italy
would be maintained, have all contributed to Turkey’s rela- Luxembourg
tively better performance Slovenia
The Netherlands
The stable and sound structure of the financial system in Spain
Turkey is the main element which enhances the resilience Greece
of the economy against the global crisis Turkey’s banking 0% 20% 40% 60% 80% 100%
system demonstrates a much stronger structure thanks to
the legal regulations implemented in the past few years
aCCession Candidates
Recovery in domestic demand is more stable and has be-
come widespread The increase in wages alongside em-
Turkey
ployment growth has been supporting the recovery in Accession. .
private consumption demand Candidates.average
Croatia
0% 20% 40% 60% 80% 100%
In Croatia almost 40% of companies expect an unfavour-
able business development next year Due to a severe drop
in private consumption and investments during the crisis, Favourable Constant Unfavourable
all sectors were affected Recovery is slowest in the con-
struction sector which was affected by the recession some-
what later than other industries
the recovery in foreign demand and the favourable climate
Forthcoming state investments in the energy and trans- concerning EU accession, should however contribute to
port sectors, water management and tourism, along with improving the mood throughout 2011
31
EUROCHAMBRES

methodology

Methodology
About the Survey
EUROCHAMBRES’ Economic Survey is an annual, qualita- companies responded Data have been aggregated at re-
tive regional survey of business expectations in Europe gional level, with 95 European regions included The 2011
The survey is implemented by the European Chambers survey is the eighteenth edition of this yearly report More
of Commerce and Industry and co-ordinated by EURO- detailed analyses of each of the participating countries
CHAMBRES It is based on a harmonised questionnaire can be found in the “National Reports” published on EURO-
sent to entrepreneurs from 24 EU member states as well as CHAMBRES’ website: www eurochambres eu
Croatia and Turkey during the autumn 2010 Over 70 500

Organisation and Methodology
Regional Chambers of Commerce and Industry through- In most countries, all regions participated in the survey In
out Austria, Belgium, Bulgaria, Croatia, Cyprus, the Czech some smaller states, the country as a whole was regarded as
Republic, Denmark, Estonia, France, Germany, Greece, “a region” The regional results have then been centralised in
Hungary, Italy, Latvia, Luxembourg, Malta, the Netherlands, each country, a national weighted aggregate was calculated
Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Swe- and extensive comments on the results were prepared Sub-
den, Turkey, and the United Kingdom have posed compa- sequently, EUROCHAMBRES brought the national reports
nies a set of 12 questions on their past, current and short and regional data together, and prepared a European report
term business expectations (total turnover, domestic sales, on the main trends resulting from the survey
export sales, employment, investment and business confi-
dence) Entrepreneurs were asked to give a qualitative re- National and European results presented in the analysis
sponse, i e “better than the previous year”, “the same as the were weighted according to national GDPs Also, when
previous year” or “worse than the previous year” Responses calculating averages or other aggregates (euro zone coun-
from entrepreneurs were collected and aggregated using tries, survey average etc ), GDP was used for weighting
random and representative sampling techniques, thereby Statistical methodologies used in the national surveys all
guaranteeing representativity by size, sector and region ensure reliable results A more detailed description of the
methodology for each country is included in the National
Reports that are available on EUROCHAMBRES’ website:
www eurochambres eu

Guidance when reading maps, graphs and tables
In.“Executive.Summary”.and.. In.“European.Regions”
“Business.Confidence.and.Economic.Indicators”
• The tables in the section “European regions”, show “per-
• The graphs in the “Executive Summary” and “Business centage shares” of the total number of responses given
Confidence and Economic Indicators” of the analysis to a question They reflect the percentage of compa-
show ‘balance figures’ These are obtained by deduct- nies that answered positively to a question (increase),
ing the percentage of companies giving a negative negatively (decrease) or opted for a neutral answer (un-
response from the percentage of companies giving a changed) Please note that they do not show “balance
positive response, thereby obtaining the “net response” figures” as is the case in the “Executive Summary” and
• Blanks in graphs reflect the absence of data for some “Business Confidence and Economic Indicators”
countries and/or years, or reflect a score of zero • The maps in the section “European regions” indicate the
regional ranking across the surveyed zone, based on the
“balance figures” obtained from the percentage shares
of the total number of responses given to a question
• Blanks in tables reflect the absence of data for some
countries or regions

32
EUROCHAMBRES

Eurochambres Economic Survey 2011

Eurochambres Economic Survey 2011

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