Keve reports uptick in business climate — highlights lingering challenges for businesses

The Cyprus Chamber of Commerce & Industry (Keve) announced this week that, according to a statement based on the 31st edition of the annual Economic Survey by the Association of European Chambers of Commerce and Industry (Eurochambres), there has been a slight improvement in the business climate compared to the historic lows of the previous year.

Despite this marginal improvement, persistent challenges such as energy and raw material supply, labour costs, and shortages of skilled workers continue to undermine expectations, contributing to ongoing uncertainty, according to the Keve statement.

The results of the Eurochambres Economic Survey 2024 (EES2024), as conveyed by Keve, still reflect the challenging conditions prevailing throughout the otherwise resilient European economy.

“The overall economic climate for 2024 remains uncertain for entrepreneurs and is exposed to the structural weaknesses of previous editions of the EES, according to all indicators of the survey,” stated the Keve announcement, adding that “the results reveal that economically accessible energy and raw material supply, labour costs, and skill shortages remain among the key challenges”.

Moreover, Keve emphasised that the EES2023, published 12 months ago, recorded the lowest level of business confidence since the survey’s inception 30 years ago, following a sharp decline last year.

Speaking during the launch event for the EES2024, Vladimír Dlouhý, President of Eurochambres, stated that “European businesses have been forced to pause for far too long, and this comes at the expense of our recovery and competitiveness”.

He added that “EU policymakers must help them change course from survival to success, rather than limit their growth through excessive regulation”.

The Keve statement further noted that “according to comments gathered from national chambers in 27 countries, European businesses are marginally less pessimistic about the next year concerning domestic sales, exports, employment, and investments compared to 12 months ago”.

“However, the results show that high consumer prices and low private consumption take a toll on domestic sales,” while “rising interest rates are expected to burden private investments,” it added.

The statement further highlighted that “many of these factors are a result of the pandemic, while others are a consequence of the ongoing war in Ukraine and geopolitical uncertainty elsewhere”.

Additionally, it emphasised that “policymakers at the EU and national levels have taken measures to mitigate the direct impacts of these major crises on the economy, but the situation remains precarious, as indicated by the EES2024”.

According to Keve, entrepreneurs identify energy and raw material supply as the most pressing challenges for 2024.

“Rising labour costs and shortages of skilled labour are also expected to remain significant obstacles for businesses next year,” it added.

“Policymakers must find solutions to these challenges in close collaboration with chambers and their member companies to achieve a more business-friendly environment,” the announcement stressed.

The findings of the EES2024, according to Keve, represent a call to action at the political level.

“The EU must take control of the elements it has power over and that prove detrimental to businesses’ efforts to move from survival to success and promote the recovery and growth of Europe,” it stated.

“One such controllable element is the stock of existing regulatory requirements and the flow of new ones,” it added.

Since the beginning of the EU’s 2019-2024 term, according to Keve, the European business community has been exposed to a large number of significant new legislative proposals.

Keve also mentioned that the pursuit of the policy goals of the Von der Leyen Commission has continued unabated, despite strong economic adversities, stating that “this inflexibility is costly for businesses”.

Additionally, Keve said that “a fully functional single market is essential to address many obstacles to development.

It continued by saying that “Chambers are determined to support a renewed effort at both the EU and national levels to reduce remaining barriers to the free movement of goods, services, people, and capital”.

In relation to the key policy messages of EES2024, Keve stated that these include rigorously addressing the stock and flow of regulatory requirements that stifle the competitiveness of EU businesses, enhancing the security of critical raw material supply for the transition to a low-carbon economy, and developing and attracting talent and skills to promote the dual transition.

Finally, it emphasised a commitment to an ambitious programme to address remaining barriers in the single market to enable economies of scale, growth, and alignment of European energy and industrial strategies with climate goals.