A study of European
business reveals a cautious investment outlook and warns of the
cost of
new regulations. Antonio Fabrizio
reports.

 

European business lobby group
BusinessEurope has called on policy-makers to make restoring access
to finance a top priority and to be mindful of cost of capital when
introducing new regulations.

It warned that an interplay
of factors including a perceived ongoing credit squeeze, limited
access to finance and a high cost of capital would translate into
less investment and growth.

However BusinessEurope
revised its GDP growth forecast to 1.8% for 2010, up from 1.1%
based on its latest survey of its members.

Exports are a main driver of
growth, increasing by 10% in August for trades within Europe and to
non-EU countries.

How well do you really know your competitors?

Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.

Company Profile – free sample

Thank you!

Your download email will arrive shortly

Not ready to buy yet? Download a free sample

We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form

By GlobalData
Visit our Privacy Policy for more information about our services, how we may use, process and share your personal data, including information of your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.

For exports going to
destinations outside Europe only, growth was 17% in August 2010
compared to a year before.

 

Germany top for
export growth

The countries with the
largest export growth in August were Germany at 15%, Poland at 21%
and Sweden at 10%.

These three countries also
recorded the highest investments. Next year, Poland is expected to
increase investment by 11% and Sweden anticipates a
7% rise.

The report highlights that
conditions for an upturn in capital spending have gradually
improved since June 2010. More than 50% of BusinessEurope members
expect to increase levels of investment next year.

However utilisation of
equipment is below pre-crisis levels, and slower corporate
restructuring is negatively affecting investment and productivity
developments.

Firms also perceive the risk
of a persistent credit squeeze as a factor in holding back
investment decisions. Limited access to finance was cited as having
a negative influence on investment decisions by 40% of
respondents.

BusinessEurope urged
regulators to introduce proportionate initiatives, mindful of their
impact on cost and availability of capital.

It said that Basel III’s
tighter capital rules for banks may be needed but will have
consequences for lending, trade finance and hedging
activity.

Smart regulation would mean introducing policies effective
and proportionate in their scope and nature, BusinessEurope
noted.