Business confidence lifts across Europe

3i’s European Barometer index has highlighted an improvement in Europe’s five largest economies.

Confidence among Europe’s private companies has increased for the first time in nearly two years, according to a survey carried out by 3i.

The European Barometer index, which gauges the mood of optimism of businesses in which 3i has invested across France, Germany, Italy, Spain and the UK, reveals that confidence has improved across each of the surveyed countries. However, the index remains negative across all five economies.

The Index has risen from –109 to –64 which, based on past correlations between Index movements and economic performance, suggests that the EU GDP growth rate may soon recover. Germany boasted the greatest increase in confidence, rising from –100 to –23. Private companies in France remain the most pessimistic, with a confidence level of –138.

Amongst the survey’s notable findings was an increase in confidence concerning the climate for making acquisitions. With the exception of France, firms in each of the countries surveyed believed that the climate for acquisition is more favourable than it was in 2001.

The Index, established by 3i in 1988, reached its highest point of +81 in June 1998. The lowest level of –109 was reached in Q4 2001.

Brian Larcombe, chief executive of 3i, said: “Previous Barometers have proved to be accurate indicators of general business conditions. While it is too early to determine whether this is the start of an upturn in the growth rate of the European economy as a whole, we are pleased to see this improvement in business confidence across Europe.'