June 2023 –edition
Contribution to economic growth of SMEs will be significantly lower than large enterprises in 2023, but SMEs will deliver a major contribution to growth in 2024
In 2021, the ENSR (European Network for Social and Economic Research) has developed an innovative quantitative tool based on the EC economic forecast published twice a year to estimate the impact on SMEs (micro, small and medium-sized) and large enterprises on economic growth in the EU. This June 2023 SME report is based on the EC forecast of May 2023 and quantifies the evolution of the European economy for 2022, 2023 and 2024.
SMEs constitute the backbone of the EU economy, not only in terms of number of enterprises and contribution to employment and GDP (over 60% of the business economy’s GDP is produced in SMEs) but also as a key source of innovation, creativity, and flexibility. Therefore, the SME development is crucial and to a large extent determines the development of the EU economy in general.
The analyses show that in 2023 the contribution to GDP growth of SMEs is expected to be considerable lower (0.6%) then in 2022 and this limited growth holds for all size classes. The expected growth is also significantly lower than for large enterprises (1.1%). In 2024, however the contribution of SMEs is expected to increase significantly more than their larger peers (both 1.8%). With this growth, SMEs are next to the non-business sectors the most import contributors to economic growth in 2024.
Within Industry, Construction and Trade, large enterprises are expected to perform better than SMEs in 2023 and 2024. Large enterprises in Industry are expected to benefit more from increase in exports. In Construction contracting housing investment will mostly affect SMEs. In 2024, SMEs in Industry and in Construction are expected to be hit more by the high borrowing costs due to the growing interest rates. SMEs in Transport and Other services however are expected to exhibit stronger GDP-growth in 2023 and 2024 than large enterprises partially explained by increasing exports and the expected “catch-up effect” for those sectors particularly affected by sluggish development in the 2020 -2022 period (e.g., tourism, hotels and restaurants) as well as by the expected rebound in private consumption in 2024.
ENSR (European Network for Social and Economic Research) is a network of organisations specialised in applied policy research with a special focus on small and medium-sized enterprises (SMEs) and entrepreneurship. Founded in 1991 by Panteia, the network covers all EU Member States. For further details see https://www.ensr.eu.
Panteia has been producing SME-forecasts for the EU economy since 1992
For more information we refer to the SME report that can be found here: link to report
Contact persons: Iñigo Isusi (IKEI), Ton Kwaak (Panteia), Aivars Timofejevs (Oxford Research Baltics) and Jacqueline Snijders (Panteia)
For more information: firstname.lastname@example.org