SMEs across Europe are much more confident about the economic climate and their prospects in 2014, according to GE Capital International’s latest European SME Capex Barometer. Total net confidence levels — defined as the proportion of businesses which reported positive sentiment, minus those reporting negative sentiment — reached 33% in Q1 2014, up from 15% in Q1 2013. The most confident markets are the UK (54%, up 21%) and Germany (flat, 45%), with confidence increasing across all other markets surveyed.

“The economic recovery in Europe is gaining traction and we are encouraged to see many markets feeling more positive about their future growth prospects. We are now looking to see this optimism translate into increasing business investment which will help fuel further growth.”
The research, based on interviews with more than 2,250 SME business leaders in Q1 2014, finds that SMEs no longer see economic uncertainty as being such a significant obstacle to investment. Only 29% of firms reported this to be a barrier, compared to around 43% last year. Encouragingly, 16% of firms reported having ‘no restrictions’ on their capital expenditure, saying they were able to invest as they wish.
The report shows that while confidence is returning, the picture for capital expenditure is mixed. Total capital investment is relatively stable year over year, (€410bn vs. €416bn in 2013), but different markets are moving at different speeds. German SMEs remain most bullish about their spending intentions, albeit posting an 18% drop on 2013, to €136bn. German SMEs cite the single biggest obstacle to investment as ‘having already invested’ (22%), suggesting prior spend may be impacting future investment intentions.

Across other markets, significant increases in capex are expected in France (€90bn, up 41%), the UK (€71bn, up 18%), and Poland (€31bn, up 29%); these are also the three markets with the strongest levels of confidence. Hungarian SMEs are set to increase spend from €7bn to €10bn whilst conversely two markets are set to decrease spend: Italy (€60bn, down 24%) and Czech Republic (€13bn, down 24%).1

Maurice Benisty, chief commercial officer of GE Capital International, said, “The economic recovery in Europe is gaining traction and we are encouraged to see many markets feeling more positive about their future growth prospects. We are now looking to see this optimism translate into increasing business investment which will help fuel further growth.”

GE Capital’s ‘SME Capex Barometer’ is a regular survey designed to provide an on-going view on investment intentions of SMEs across seven European countries, namely the Czech Republic, France, Germany, Hungary, Italy, Poland and the UK.

The latest results are based on 2,292 respondents with fieldwork completed between 13th January and 14th February 2014. Interviews completed online in all markets except Czech Republic and Hungary where combination of online and telephone was employed. Research compiled for

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