Labour, energy costs stifling businesses

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High labour costs, plus access to energy and raw materials, are the main challenges expected to be faced by Cypriot businesses in 2023, based on the Eurochambres Εconomic Survey.

The Cyprus Chamber of Commerce and Industry (CCCI) points out that entrepreneurs’ resilience cannot be taken for granted and that Europe’s business community has suffered multiple blows over the last three years.

“Our entrepreneurs continue to show impressive resilience in the face of unprecedentedly strong economic and geopolitical headwinds.

“But this resilience cannot be taken for granted and cannot go on indefinitely”.

It said this is underlined by the 30th annual edition of the Eurochambres Economic Survey – based on responses from over 42,000 companies in 25 European countries.

Based on the research in Cyprus, 21% of the participants said the main challenge Cypriot businesses face in 2023 is the high labour costs, while 19% expressed concern about energy and raw materials access.

About 18% responded that businesses in 2023 will face problems with supply chains, 15% are worried about shortages of skilled workers, and 14% of businesses are worried about possible new restrictions due to Covid-19.

Regarding domestic sales, 34.9% of Cypriot businesses expect an increase, 20.8% are preparing for a decrease, and 44.3% said sales would remain at the same levels.

On exports, 40.7% of Cypriot companies expect an increase, 23.7% predict a decrease, and 35.6% said they would remain the same.

Some 32.3% expected an improvement in employment levels, 59.4% said it would remain the same, while only 8.3% believed it would drop.

Investments in 2023 are expected to remain the same according to 56.1% of the companies, while 28.3% think there will be an increase and 15.6% a decrease.

Business confidence also seems to be affected as 44.5% of entrepreneurs say there will be stagnation, 26.2% that there will be an increase and 29.3% a decline.

European Chambres urge the EU and national policymakers to be conscious of the plight of entrepreneurs and recalibrate the legislative agenda to allow them sufficient breathing space to safeguard their future and drive Europe’s medium to long-term sustainable growth.