Survey on the Access to Finance of Enterprises: moderate tightening in reported financing conditions
- Euro area enterprises signalled more positive developments as regards the supply of bank loans, reflected in a slight increase in bank loan availability, fewer obstacles to obtaining loans, as well as an improvement in banks’ willingness to lend.
- Fewer firms recorded a moderate tightening of financing conditions in the second quarter of 2024. Firms reported a slight reduction in the need for bank loans and improvements in the availability of bank loans. As a result, there was a small decrease in the bank financing gap with respect to the previous quarter.
- More enterprises reported an increase in turnover over the last three months, and firms were optimistic about developments in the next quarter. Fewer firms saw a deterioration in profits, while increases in labour and other costs were indicated less often than in the previous quarter. Cost pressures remained widespread.
- A small share of firms in net terms indicated an increase in average hours worked in the second quarter of 2024, which was mostly associated with an increase in demand for own products and services and difficulties in hiring labour. The increase was driven by the services sector.
- Firms expected their selling prices and wages increases to moderate over the next 12 months, with average increases of 3% and 3.3% respectively. Firms in the services sector expect a larger increase in selling prices, wage costs, non-labour input costs and employment over the next 12 months compared with other sectors.
- Firms’ inflation expectations declined, with their median expectations for annual inflation in one, three and five years all standing at 3.0%. A high share of firms (50%) considered that risks to the inflation outlook in five years were tilted to the upside, rather than the downside (10%).
Published on 18 July 2024