The annual report on European SMEs for 2014 shows that the financial situation for small and medium enterprises is on the mend, and that they have started hiring again.
The turnaround comes after years of downsizing, lasting up until 2013, when European SMEs were still shedding 0.5% of their workforce. In 2014, SMEs have accounted for the lion’s share of new jobs created in the non-financial business sector, with 71.4%.
Based on estimated data, in 2014, some 22.3 million SMEs in the non-financial business sector employed almost 90 million people and generated more than EUR 3.7 trillion in value added across the 28 EU countries. Compared to 2013, SME value added in EU countries has grown by 3.3% and employment by 1.2%.
The SME revival is largely a result of improved macro-economic and business conditions. However, employment still needs to increase in order to achieve a full recovery from the crisis. While the number of SMEs in 2014 is almost 2.5% higher than in 2008, the level of SME employment is, despite the recent surge, still 1.3% below the 2008 level.
Across EU countries the report shows 3 levels of development:
- Austria, Belgium, Germany, France, Luxembourg, Malta, Sweden and UK have in 2014 surpassed their SME employment and value added levels of 2008.
- Estonia, Finland, Lithuania and the Netherlands have had a positive growth rate in value added, but are still below 2008 employment levels.
- Bulgaria, Czech Republic, Croatia, Cyprus, Denmark, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Poland, Portugal, Romania, Slovenia and Spain have still not reached 2008 levels in employment and value added.
The positive developments for European SMEs are expected to gain momentum in 2015 and 2016 with an annual growth of 3.3% (2015) and 3.7% (2016) in value added.
Employment should also rise by 0.8% and 0.9%, creating around 1.5 million new jobs in 2016. By then, SMEs are also expected to have overcome the crisis in terms of employment.