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Only 33% of Cypriot firms upbeat for 2022

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European companies’ general optimism for 2022 is dented by concerns over affordable access to energy and raw materials and shortages in skilled workers.

It said only 33% of Cypriot businesses are more optimistic for 2022.

These are among the key findings of the 2022 Eurochambres Economic Survey, based on responses from over 52,000 businesses in 26 countries.

All EES2022 indicators show that businesses expect to perform better in the coming year, following the deep dip in 2021.

European companies expect an increase in domestic sales and an even stronger increase in exports.

Investment levels are also set to rise, and the general level of business confidence for the year ahead and employment levels should stabilise.

“However, the economic recovery remains uncertain: affordable access to energy and raw materials, as well as the lack of skilled workers and rising labour costs, are major concerns for entrepreneurs, which will impact on Europe’s competitiveness and recovery in 2022 and beyond if not effectively addressed,” said Eurochambres.

“Entrepreneurs highlighted challenges linked to supply chain disruption and fundamental changes in consumer behaviour.

President of Eurochambres, Christoph Leitl, said: “Entrepreneurs across Europe are doing what they can to drive both the recovery and the twin transition, but their efforts are jeopardised by high energy and raw materials prices and skills shortages.

“Europe must act quickly, effectively and decisively to address these challenges”.

The survey recommended that Increasing labour shortages require reforms in education and training programmes to align with evolving business needs and the twin green/digital transition.

Cyprus

The findings for Cyprus, according to the CCCI, although indicating an improvement from last year, are less optimistic than other countries.

The survey showed that 33% of Cypriot businesses are more optimistic about 2022, while 48% believe their optimism remains at the same levels, with the result being very close to the European average.

It said that the major repercussions of the pandemic on Cypriot businesses were the problems that arose in tourism due to travel restrictions, COVID lockdowns and the changing habits of consumers, disruptions in the supply chain and households facing difficulties in meeting their loan obligations.

In addition, the main challenges which Cypriot businesses are expected to face in 2022 are labour costs, lack of skilled workforce, access to loans, the continued rise in the price of energy and raw materials, digital transformation and their environmental requirements.

The survey also showed that 24% of Cypriot businesses believe they will have increased domestic sales in 2022, while 46% believe their sales will remain at the same levels.

A further 45% believe fewer exports will be in 2022, while 31% believe exports will remain at the same level.

The CCCI said that although predictions have improved since last year’s, they are still below the European average.

Some 27% of Cypriot businesses believe they will need more staff in 2022, 56% believe they will not have a problem, while 29% will make increased investments next year.