Spending intentions increase by nearly 20% on Q3 2012, driven by Western European SMEs' increasingly bullish attitude to investment
2.4m new jobs planned in next year, with total headcount intentions flat vs. Q3 '12
London, 20th May 2013: GE Capital's latest European SME Capex Barometer shows an improving appetite for capital expenditure ('capex') across European SMEs, despite the uncertain European economic environment. The research also highlights a disparity in confidence among SMEs -- with German and UK SMEs most optimistic about growth in their sector, whilst SMEs in France, Italy and Hungary remain much more cautious.
The research, conducted amongst 2,250 SME business leaders across seven European markets during Q1 2013, shows capex is set to be driven by Germany (€164bn up 59% on Q3 2012), Italy (€79bn up 13%) and the UK (€59bn up 13%). French SMEs also post a small increase in investment intentions (€63bn up 5%). In contrast, data show a decline in investment intentions of 23% q/o/q across the Czech, Hungarian and Polish markets, to €48bn in total.
Maurice Benisty, Chief Commercial Officer of GE Capital EMEA, said: "Whilst economic fundamentals are still weak, our research points to an appetite among SMEs -- particularly in Western Europe -- to increase investment and staff. For us, and many businesses in Europe, the focus in 2013 is on delivering results, outperforming and building a platform for future growth."
Other key findings from the research include:
- A headcount increase of more than 2.4m is planned in the next 12 months, driven by Germany (986k up 12% q/o/q), the UK (526k up 16%) and Italy (379k up 43%)
- Estimated loss of income due to out-of-date or inefficient equipment has decreased by 30% in the EU4 and 3% in the CEE3, to €52bn and €5.7bn respectively
- A majority (51%) of all respondents cited upgrading existing equipment to enhance efficiency and productivity as a major reason for investing
- 42% of respondents across all markets cited the uncertain economic environment as the single main barrier to investment
- Traditional high street banks are the preferred financing option for 42% of SMEs in the EU4, but only a quarter said they are actually likely to secure a bank loan
The research finds that the average German SME is likely to direct over €138k towards capex in the coming year. This figure drops to €70k per Italian, €58k per UK and €54k per French SME. In the CEE markets, Polish SMEs are likely to spend an average of €93k each, Czech firms €75k and Hungarian SMEs just under €39k each.
Capital investment across all markets is expected to be directed predominantly towards manufacturing equipment assets, (€190bn up ~20% from Q3 2012) with commercial vehicles set to account for €69bn of overall spend -- this amount remaining stable on last quarter's estimated expenditure.
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 France, Germany, Italy and the UK
 Czech Republic, Hungary and Poland
GE Capital EMEA