EIB Investment Survey 2021 - European Union overview

By European Investment Bank

This unique insight into the corporate investment landscape in the European Union examines companies' finance needs and the constraints they face. The 2021 edition delves into the massive shock produced by the COVID-19 crisis, and the response and recovery programmes put in place by the European Union and by national governments. The report assesses the extent to which European firms are addressing the need make their businesses more green and digital. The survey is based on interviews with 12 000 companies across the 27 European Union countries, and it includes a benchmark sample from the United Kingdom and United States. This overview provides the aggregated results for the European Union. Results for individual countries will be published in January 2022.

• Language: English
• Publisher: European Investment Bank
• Release date: Dec 2, 2021
• ISBN: 9789286150913

Book preview

EIBIS 2021 – European Union overview

KEY RESULTS

Investment dynamics and focus

EIBIS 2021 shows an improving investment outlook. While the share of EU firms having invested in 2020 declined, EU firms are more positive with respect to their 2021 investment plans, with more EU firms expecting to increase rather than decrease investment. The investment cycle is turning, from a low base: EIBIS data shows low investment in 2020 (79% of firms investing) but firms now expect to increase investment in 2021, a sharp turn-around from the previous year.

COVID-19 impact

COVID-19 had a strong impact on EU firms, with 49% of EU firms suffering a drop in sales due to the pandemic, compared to 21% that were able to increase sales. Investment was also impacted, with 26% of EU firms reporting they had reduced their planned investment due to COVID-19.

Despite this, almost half (46%) of EU firms say that they have taken action(s) or made investment to become more digital due to COVID-19. This is, however, less than in the United States, where 58% of firms state the same.

Investment needs and priorities

COVID-19 undeniably has a long-term impact on needs and priorities. Again, digitalisation stands out, with the vast majority of firms indicating that they expect COVID-19 to lead to an increased use of digital technologies in the long term (55%).

Nearly half (49%) of all EU firms report that they were operating at or above full capacity during 2020, less than in EIBIS 2020, where it stood at 61%. In addition, 14% of firms report investing too little, largely in line with EIBIS 2020.

Looking ahead to the next three years, the share of firms that have no investment planned declined slightly in EIBIS 2021 (9% vs. 13% in EIBIS 2020). While investment in replacement remains the main priority, capacity expansion has become more important, overtaking investment in new products or services (32% and 26%, respectively).

Innovation activities

More than a third (36%) of EU firms developed or introduced new products, processes or services as part of their investment activities, lower than in EIBIS 2020 (42%), but still higher than in EIBIS 2019 (33%).

In total, 61% EU firms have implemented at least one advanced digital technology, largely in line with EIBIS 2020 (63%) and remaining below the share in the United States (66%).

Drivers and constraints

On balance, firms are optimistic about investment conditions in the next year, with sentiment indicators for the economic climate and internal finance availability switching back to positive as the recovery is felt.

Recovery has brought a marked uptick in firms seeing skills availability, energy costs and transport infrastructure as constraints, while the impact of uncertainty has eased.

Investment finance

Access to finance conditions remained very benign. Only 5% of firms across the European Union could be considered financially constrained in 2020, largely in line with EIBIS 2020.

As a result of the crisis, 16% of EU firms increased debt and 5% received new equity from their current owners and 2% of EU firms received new equity from new sources. Around half