European Central Bank report finds profits climbing more than at any time since crisis
about 11 hours ago
The ECB figures are based on questions to more than 11,000 small and medium-sized businesses. Photograph: iStock
Irish small and medium sized enterprises are reporting higher employment than any other state in the euro zone, according to the European Central Bank (ECB).
The ECB’s semi-annual survey of small businesses’ financing conditions between April and September found that more companies reported an increase in profits than a decrease for the first time since the surveys began in 2009.
The Republic was among the states recording the greatest improvements.
SMEs continued to report an increase in the availability of bank loans and bank overdrafts. SMEs in Spain, Portugal and the Republic perceived the availability of bank loans to improve the most.
Greece, on the other hand, remained the only country where SMEs continued to indicate a net deterioration in the availability of bank loans, albeit to a greatly reduced extent.
In terms of the net percentage of SMEs reporting higher employment, the Republic was highest with 24 per cent of businesses reporting an increase in staff.
When asked whether “access to finance” was a problem in their current situation, SMEs in Greece continued to perceive it as a very important issue (seven on a scale of one-10). An average score of five was reported by SMEs in Italy, the Republic, Portugal and Spain.
Among the other euro area countries, the net share of SMEs perceiving an improvement in the availability of banks loans was highest in Portugal (22 per cent, from 16 per cent), which was ahead of the Republic (17 per cent, from 21 per cent).
Irish (22 per cent), Finnish (7 per cent), Greek (6 per cent) and Slovakian (1 per cent), SMEs reported increases in bank lending rates during the period under consideration.
With regard to financing costs not related to interest rates, higher levels were most frequently perceived by SMEs in Greece (43 per cent), Portugal (42 per cent), Austria (36 per cent), the Republic (35 per cent) and Slovakia (33 per cent).
The figures are based on questions to more than 11,000 small and medium-sized businesses, the vast majority of which have fewer than 250 employees.
The ECB was encouraged by the results, which it said “support the ongoing economic expansion” and highlight the success of its monetary stimulus package, noting: “The pass-through of the monetary policy measures introduced in June 2014 continues to facilitate SMEs’ access to credit.”
The survey results follow similarly positive hard data on credit growth in the wider euro zone economy released yesterday. The ECB’s monthly money supply data showed loans to businesses increased at their fastest rate since the financial crisis in the 12 months to October, further highlighting the recent recovery in demand.
(Additonal reporting: The Financial Times Limited 2017)