There is renewed belief amongst the leaders of Europe's biggest industrial companies as they look forward into the first half of 2021, with a significant rebound in confidence for their businesses, the EU, and the economy.
Making industrial valves
Many large companies were looking at investments outside Europe. Photo: Simone D. McCourtie / World Bank Photo Collection / Flickr
A twice-yearly survey carried out by the European Round Table for Industry has shown that, despite the strong resurgence of Covid-19 infections across the continent, Europe's industry leaders said there had been a vast improvement in business conditions.
The survey, which polls CEOs and chairs of 55 of Europe's largest companies - with combined revenues of €2 trillion - found that confidence had soared from 34/100 in May up to 61/100 at the end of October.
With the subsequent news of successful vaccine trials breaking since then, it is expected that this number would be even higher.
Meanwhile, many industrial sectors are priming themselves to kickstart investment in Europe, with an even greater number anticipating an increase in investment from outside the continent.
Not everyone will be able to share the hope of recovery, however. 51% of the industrialists polled signalled the expectation that employment in Europe is set to decline.
Moreover, 81% of the leaders said they intended to cut office space by as much as 25%.
Chairman of Volvo Group, Carl-Henric Svanberg, told the FT that there was still a very real chance that the recovery could be derailed.
“There is still a lot of fragility in the European economy — much of which can affect smaller companies that large industrials rely on in the supply chains,” he said.
Frans van Houten, CEO of Royal Philips, spoke about "ongoing political tensions" - for example, the rising tension between China and the US.
Many other industry leaders stressed that while confidence and optimism would keep growing with the hope of a successful vaccine, significant challenges remained.
European industry would need to stay competitive, not just as the continent recovered from the impact of the coronavirus, but also as it dealt with digitalisation, climate change, and Brexit.
The survey also showed that, despite supply chain vulnerabilities exposed by the pandemic, 79% of the leaders who responded had no plans to reshore.
Martin Brudermüller, chairman of chemicals group BASF, told the FT that it was telling that European companies expected to invest more heavily outside the bloc that within it.
“Europe’s economies have been heavily impacted by Covid-19 but are on a recovery now month by month. The further recovery will strongly depend on how the various ambitions addressed by the EU Green Deal are translated into workable . . . conditions that ensure the international competitiveness of industry,” he said.
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