Major European-based companies are positive about the global business outlook, according to a new survey commissioned by the European Round Table of Industrialists (ERT). The first ever ERT CEO Economic Confidence Survey, conducted by the Centre for European Economic Research (ZEW), showed nearly 80% of ERT Members are confident about the European and global economy.
However recent discussions among ERT Members also show widespread concern about Brexit and the unprecedented challenges presented by the UK’s decision to leave the European Union – particularly in relation to future business investments. ERT Members are calling for greater clarity about the way forward in the short term and a focus on maximising continuity of policy and regulations in a transition period.
"After the challenging years which followed the global financial and economic crisis, the upward economic trend, especially in Europe, is particularly pleasing and gives us confidence for the near future. Although we ourselves are very well positioned, surveys of leading CEOs again clearly show that European companies need long-term political and economic planning certainty—for instance, a rational, globally acceptable EU energy and climate policy—in order to be able to use this positive environment to make investments. "
The long-term relationship between the UK and EU is of great importance given the scale of the UK economy and its capabilities in security, defence, intelligence and diplomacy.
While discussions progress on the UK’s long-term relationship with the EU, an effective transition period is necessary to provide certainty over the next two to three years. Businesses will soon be actively planning for 2019 and both EU and UK businesses need a predictable pathway within the next three months if investment decisions are not to be materially impacted.
ERT Members, including the Chief Executives and Chairmen of 57 of Europe’s largest companies, believe this approach is in the best interests of both sides. It is the only way to minimise disruption and enable firms to adapt their business strategies.
Sales and investments stronger outside Europe – Cyber-security as threat to digitisation
Companies anticipate a moderate increase of sales in Europe and a slightly stronger development outside Europe – reflecting the participation of European multinational companies in the current global economic recovery and the acceleration of world trade. The survey points to the importance of trade and unrestricted access to global markets. The survey also sends a positive signal for long-term growth expectations: Nearly 50% of the ERT Members plan to increase their investment in Europe and an even larger share intends to increase investment outside of Europe.
The survey further highlights cyber-security threats to digitisation and the investments planned by businesses to address them. Around 80% of ERT Members state that cyber-security threats are indeed a barrier for further digitisation and, hence, are an important issue in their investment agenda. All companies of ERT Members plan to invest to improve their cyber-security framework in the next twelve months. Most important deficits are seen in the areas of public investment in technical infrastructure, harmonisation of cyber-security strategies among EU Member states and international cooperation between the EU and other countries.