Business confidence up

01 October 2003

Tweet
Facebook
LinkedIn
Google plus
Send to

The latest 3i European Barometer Index, measuring private companiesâ€™ confidence in business, political and economic climates has posted a rise of 100 points since the previous survey. The Index is the least negative that it has been for two and a half years, rising to a combined -17 from the record low of -117 in the March 2003. The last Barometer index, which came out in April, was clearly much impacted by the political climate, especially surrounding the situation in Iraq. The survey, undertaken whilst military action was under way, shows the lowest level of optimism since 1998. Despite this however, turnover expectations remained robust and 3i-backed companies in general were not expecting it to impact their sales. This quarter, the first since the fall of Baghdad, reveals that 3i-backed companies are more optimistic about the overall economic climate. Confidence about prospects for their own businesses remain relatively equal to last quarter, slipping very slightly, from +33% to +28%. The index is now positive in Germany (+12), the Nordic countries (+45) and Spain (+46), however this is not yet flowing into sales as yet. The Index has increased most in Spain and the UK (from -128 to -14) in the last quarter and remains lowest in France (-95), reflecting poor official figures on the state of the French economy. In the UK, the number of 3i-backed companies expecting their sales to increase has risen to its highest level in over a year. Over half these companies also expected their turnover to also increase this quarter. The Midlands, however, remains more negative about their prospects and turnover for the second survey in a row. UK non-manufacturers (+39) remain more optimistic than manufacturers (+21%), although both are more positive than they were in the last survey. Overall, although turnover and profitability expectations remain static, the balance expecting to increase investment has recovered a little from a low of -13% to -7%, driven mainly by improvements in the UK (from -11% to +7%) and Germany (from -18% to -4%). 3i-backed companies in Italy (was +7%, now -9%, ) and the Nordic countries (was 16%, now -24%) are, however, expecting to cut back on investment more sharply than in the previous survey.