Luxembourg, 13 October (2023): The European Investment Bank Investment Survey (EIBIS) 2023, announce today at the World Bank IMF Annual Meetings, European companies handle challenges during pressing investment needs and tightening financial conditions.
Facing increased financial control, European firms respond by accelerating investments in energy efficiency, with 51% investing in the past year to counter energy price shocks.
The survey, conducted on 13,000 businesses in mid-2023, disclose that corporate investment has remained tough across the EU, returning to pre-pandemic levels.
Profits for about 80% of EU firms also rebounded to pre-COVID levels, driven by structural transformation urgency and accumulated buffers.
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Furthermore, internal finance buffers and policy support play a vital role in sustaining investment levels, acknowledged by the businesses.
However, climate change has left its mark, with 64% of firms experiencing losses, an increase of 7% from the previous year.
Surprisingly, only half of those affected are actively building climate resilience, and a mere 13% are insured for physical risk protection.
Despite this, 29% of European businesses view the climate transition as an opportunity. On average, they chase their U.S. counterparts in investing to combat climate change.
Positive impacts from policy support and government grants, averaging close to 2% of GDP, further contribute to investment. However, the reduction in financial aid amplifies the impact of tighter financial conditions added in survey.
EIB Vice-President Ricardo Mourinho Felix emphasizes, “The EIBIS 2023 underscores the resilience of European firms in the face of evolving challenges. It is encouraging to see their continued commitment to investment amidst tightening financial conditions. It is essential for policymakers and stakeholders to recognize the pressing need for targeted support measures to sustain and stimulate investment as well as to help them build climate resilience.”
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EIB Chief Economist Debora Revoltella added, “The main challenge ahead is related to the competitiveness of EU firms, and this requires continued investment. Maximizing returns on digital investments, reducing energy consumption, and addressing skill shortages are critical to ensuring sustainable growth and securing Europe’s position in the global market.”
In conclusion, the EIBIS 2023 report highlights as a valuable resource for policymakers, economists, and business leaders, offering insights into the investment landscape and identifying key areas requiring attention for fostering economic growth and strength.