Eurozone companies expect an average increase of 6.1% in prices and 5.4% in wage costs over the next year, according to a European Central Bank (ECB) survey on business access to information. financing.
According to the results of the survey, released this Wednesday, “companies in the euro zone registered a continuous increase in their turnover, while labor, production and interest costs penalized their profitability.”
Large companies report a greater improvement in their business activity and turnover than small and medium-sized enterprises (SMEs), with 16% of these reporting that their profit has decreased, while large companies state that it has not changed.
The drop in profitability reflects an increase in labor costs, with 77% of companies stating that these costs have increased, which is an all-time high in the survey.
The rise in interest rates also had a negative impact on corporate profitability in the euro area.
Additionally, 89% of the companies surveyed reported that their costs with materials and energy had increased, a slightly lower percentage than in the previous survey. Even so, they foresee a further increase in turnover in the next six months.
The main concerns pointed out by the companies are the lack of qualified labor and the increase in production costs.
Eurozone companies reporting a deterioration in financial conditions were also at a record since the ECB began surveying companies’ access to finance in 2009, as was the percentage of companies saying prices and conditions of bank loans are more demanding. .
The ECB conducted this survey between March 6 and April 14, 2023, covering the period from October 2022 to March 2023.
The sample includes responses from 10,983 companies, of which 10,085 (92%) are SMEs (companies with less than 250 employees).
Source: TSF
