ECONOMIC CONFIDENCE SURVEY SPRING 2018

Transcription

1 20 may Department Economics of Innovation and Industrial Dynamics Centre for European Economic Research (ZEW) ERT

2 Business Outlook Index May 2018 VERY POSITIVE NEUTRAL VERY NEGATIVE ERT SCORE VERY POSITIVE SOMEWHAT POSITIVE SOMEWHAT NEGATIVE VERY NEGATIVE How would you characterize the general business outlook for your company right now? 17% 15% 67% Share of answers Source: ERT Confidence Survey 2018/1 Total number of answers (N): 52 Source: ERT Confidence Survey 2018/1 2

3 Comparison to the last survey: general business outlook VERY POSITIVE SOMEWHAT POSITIVE SOMEWHAT NEGATIVE 6% 1 17% 16% 15% 67% 67% VERY NEGATIVE N = 52/51 Autumn 2017 Spring 2018 Sources: ERT Confidence Survey 2018/1 ERT Confidence Survey 2017/2 3

4 Business Outlook Index Detailed results NO CHANGE In Europe SALES INVESTMENT EMPLOYMENT Outside Europe In Europe Outside Europe In Europe Outside Europe In Europe Outside Europe Sources: ERT Confidence Survey 2018/1 ERT Confidence Survey 2017/2 4

5 Business Outlook Index Index - Detailed results (Comparison to the last survey) NO CHANGE SALES INVESTMENT EMPLOYMENT In Europe Outside Europe In Europe Outside Europe In Europe Outside Europe Autumn 2017 Spring 2018 In Europe Spring 2018 Outside Europe Sources: ERT Confidence Survey 2018/1 ERT Confidence Survey 2017/2 5

6 Over the next six months, what do you expect will happen with your company s sales? 6% 2 Reference forecast (2018/2019): EUROPE % 59% Expected GDP growth 2.3% 2. Expected growth of exports % EURO AREA 2 31% Expected GDP growth 2.3% 2. Expected growth of exports 5.4% 4.4% WORLD 8% Expected GDP growth 3.9% 3.9% Expected growth of world trade1 4.7% Share of answers N = 51 In Europe Outside Europe Source ERT Confidence Survey 2018/1 ECFIN: European Economic Forecast Spring : Global export volume 6

7 Comparison to the last survey: next six months sales expectations In Europe Outside Europe 1 6% % 55% 61% 59% 2 31% % 4% Autumn 2017 Spring 2018 Autumn 2017 Spring 2018 Sources: ERT Confidence Survey 2018/1 ERT Confidence Survey 2017/2 7

8 Over the next six months, what do you expect will happen with your company s capital investment? 1 18% Reference forecast (2018/2019): EUROPE % 43% Gross Fixed Capital Formation Private Consumption 1.8% 1.8% Public Consumption 1.4% 1.3% 37% 51% Share of answers N = 51 In Europe Outside Europe Source: ERT Confidence Survey 2018/1 ECFIN: European Economic Forecast Spring

9 Comparison to the last survey: next six months investment expectations In Europe 6% % 39% 41% 51% Outside Europe 1 18% 4% 35% 37% 47% 43% Autumn 2017 Spring 2018 Autumn 2017 Spring 2018 Sources: ERT Confidence Survey 2018/1 ERT Confidence Survey 2017/2 9

10 Over the next six months, what do you expect will happen with your company s employment? 4% 1 Reference forecast (2018/2019): EUROPE % 4 Employment growth 1.1% 0.9% Unemployment rate 7.1% 6.7% EURO AREA 48% 4 Employment growth 1.3% 1.1% Unemployment rate 8.4% 7.9% 6% 17% Share of answers N = 52 In Europe Outside Europe Source: ERT Confidence Survey 2018/1 ECFIN: European Economic Forecast Spring

11 Comparison to the last survey: next six months employment expectations In Europe 4% 13% 21% 17% 31% 48% Outside Europe 8% 1 8% 6% 35% 4 48% Autumn 2017 Spring 2018 Autumn 2017 Spring 2018 Sources: ERT Confidence Survey 2018/1 ERT Confidence Survey 2017/2 11

12 How should European tax legislators react to preserve/enhance competitiveness of European companies? Reduce effective corporate tax rates in Europe Increase targeted tax incentives for investment (e.g. R&D) Avoid developing harmful and aggressive tax regimes by EU Member States Reduce international double taxation of profits or sales 31% 27% 37% 5 Reduce opportunities to shift taxable profits to the US 6% Support further international harmonization efforts at OECD level 37% N = 52 Maximum number of answers per Member is 2 out of 6 12

13 How should the European Union respond to new global tendencies towards protectionism in international trade and the risk of a trade war? Support the WTO trade dispute settlement and multilateral trade negotiations Reinforce EU trade defence and take retaliatory measures Drive meaningful trade opening through bilateral trade agreements Send a signal of support for open markets through unilateral trade liberalization measures Create an alliance of good will to promote the world trade system Address in a systematic way the legitimate concerns of EU citizens regarding globalization Other: 13% 1 19% N = 52 Maximum number of answers per Member is 3 out of 7 27% 38% 6 87%

14 How should the European Union respond to new global tendencies towards protectionism in international trade and the risk of a trade war? Important points mentioned under Other (option n 7): FREE INTERNATIONAL TRADE IS WELCOMED BUT/AND Should be carried out carefully (Especially with other large markets such as China) Level playing field for multinationals and in third countries is important Climate agenda needs to be included in open trade strategies Unfair/outdated tax legislation needs to be addressed (by EC and/or national governments) Create a better dialogue to fight protectionism/populism and support the future with innovation and competition Tax incentives for investments in Europe Source: ERT Confidence Survey 2018/1 14

15 Appendix Construction of the ERT Index Score: The ERT Index is a quantitative measure to ease the interpretation of the results of the survey, enable comparison between different survey waves and also between the assessment of the likely development between regions. The index turns the shares of firms expecting a significant increase, a moderate increase, no change, a moderate decrease or a significant decrease into a single number. The index is built as follows: Index=1/N (n1 10+n2 5+n3 0+n4 ( 5)+n5 ( 10)) Where n1 to n5 represent the number of participants who chose the different answer options with n1 indicating a significant increase to n5 indicating a significant decrease. The sum in parentheses is divided by the total number of responses (N) to bind the index between 10 and 10. In case all ERT Members expect a significant increase (decrease) the index will take the value of 10 (-10). If the responses are equally distribute between the 5 categories the index amount to 0. Positive values of the index correspond to positive expected growth rate of the underlying variable, negative values to a negative growth expectations. The construction also implicitly links larger values of the index to larger growth rates. 15