European businesses are less pessimistic than they were in June, but more are worried about rising prices, according to a survey released Thursday by BusinessEurope. The improvement in sentiment spans both industry and services.
Among the industry groups surveyed, 33% reported a negative outlook, down from 62% in June. In services, the share fell to 30% from 50%. Expectations for investment also improved, particularly in industry, although BusinessEurope revised down its forecast for investment growth this year.
Higher Energy Costs Keep Inflation in Focus
Almost half of the business groups surveyed said they were very concerned about inflation, up from 40% in June. Eurozone inflation reached 4% in October, a three-year high, as food and energy costs rose. Energy prices were up 20% from a year earlier.
BusinessEurope also warned that rising public debt and higher interest costs were leaving several EU countries more exposed to changes in investor confidence. More than half of the groups surveyed considered their own government’s fiscal policy too expansionary. A large majority regarded the European Central Bank’s policy stance as appropriate.
