3i European Enterprise Barometer shows European companies neutral on outlook
After seven confident quarters, the 3i European Enterprise Barometer Index, which measures private companies' confidence in business, political and economic climates for Europe, has declined from +44, which was the fourth highest rating since the Barometer was launched in 1998, to +4.
One interesting aspect of the survey is that the business leaders of these private European companies appear less confident with respect to starting up or growing an existing business organically, but more confident about acquisitions as a means of creating value. This appetite for acquisitions is the main positive driver of the European Index for the quarter.
Germany (+53) and the Nordic countries (+46) still hold the highest Index scores. There were substantial decreases in confidence in Italy (-64) and the UK (-46) who now have the lowest Index scores of all the countries in the survey. The Index also fell in France (+33 to +16) while Spain is the only country to see the reverse development (+16 to +28).
Philip Yea, 3i CEO commented: "There are no great surprises in these numbers, entrepreneurs prefer a stable economic and political backdrop and confidence in Europe. The lowering in confidence in the UK and Italy is consistent with other indices for these Economies."
Notes for Editors
The 3i UK Enterprise Barometer is compiled every quarter from the responses of a sample of companies in the UK in which 3i has an investment. The initial base of +100 was established in January 1988. The Index reached its highest level of +142 in the first quarter of 1994 and its lowest level of -170 in the first quarter of 1991.
The 3i European Barometer was started in June 1998 and is compiled every quarter from the responses of a sample of companies in the UK, France, Germany, Italy, Spain and the Nordic region in which 3i has an investment. This survey was carried out in July-August 2005. The sample size was 245. The index uses the same base as the UK Barometer and it is weighted by size of country (as measured by GDP).
The 3i Barometer has been a good lead indicator for GDP growth across Europe since it began in the UK in 1988 and then spread to the rest of Europe in 1998 (see chart 4, page 3).
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