European SMEs on course for recovery

Small and medium-sized enterprises (SMEs) in the European Union (EU) appear to have turned an economic corner in 2013, according to a report from the European Commission (EC).

The EC's annual report on the 20 million SMEs within the EU covers the period 2012/13. Its key findings are that total employment is expected to increase in 2013 by 0.3 per cent and output (known as 'value added') by one per cent since 2011.

This would be the first combined increased in both areas since 2008.

The report highlights some of the challenges that were facing European SMEs as recently as 2012:

  • job losses of around 610,000 jobs - or a 0.7 per cent - decrease compared to 2011
  • GDP contribution declined by 1.3 per cent from €3.44 trillion in 2011 to €3.39 trillion in 2012
  • medium-sized enterprises posted the highest loss in 'value added', at €17 billion
  • micro enterprises saw a €14 billion loss in value added
  • small enterprises recorded a €13.2 billion value added loss.

The EC said that such a turn-around was a "remarkable testimony to the resilience of the EU SMEs" when considered against the severity of the 2008 crisis.

The report stressed that more must be done at a policy level to support these signs of a fragile economic turnaround, including the promotion of:

  • harmonised policies
  • improved conditions to access finance
  • strong public demand for SME's goods and services
  • appropriate attention to labour market policies
  • a decrease in late payments
  • simpler regulatory and administrative requirements.

Antonio Tajani, Vice President of the EC, said:

"After five years of sluggish development I am glad to see that SMEs are about to grow again. They are also starting to recruit more staff. Moreover, our indicators make it clear, that SMEs can grow further in 2014. SMEs are the lifeblood of our economy as they are now dragging us out of the most severe crisis of EU economy in the past 50 years."