Europe

HSBC Navigator provides comprehensive insight into the now, next and how for business, representing the views of over 9,100 business decision-makers across 35 markets. This report gives an understanding of how businesses like yours can continue to grow now and in the future.

Europe thrives
Despite weakness in the recent European data, our survey paints a mostly optimistic picture of business prospects, in line with the global average. This optimism is driven by external and internal factors, including investment in technology, new markets opening up and an increasing interest in sustainability, making European firms confident that there are growth opportunities in the next year and over the longer-term.

State of play

Bullish outlook for European businesses
Businesses across Europe are bullish about their prospects, with nearly four in five (79%) projecting growth over the coming 12 months, in line with the average globally. This confident outlook is being driven by a number of particularly optimistic markets, including Poland, where 88% of firms project growth in the coming 12 months, along with Spain (85%), Greece (85%) and France (84%). Over the past year, 41% of European markets have become more optimistic about the business outlook. In four markets – Greece (65%), UK and Poland (51%) and France (50%) – at least half of all companies are more optimistic than they were a year ago.

Expectations around longer-term growth are equally high. Over the next five years, 90% of firms in Greece project growth, so do companies in Spain (89%) and Poland (87%). These are the most bullish of all European markets. Nearly one in five of European businesses (19%) project growth of 15% or more over the next five years.

Markets that are positive about their future growth outlook, and where firms continue to innovate and transform as they pivot to meet the changing global trade environment, include the UK, Ireland and Poland. Around two in five (41%) companies in Europe are expecting their businesses to change totally or substantially in the next five years. The UK (66%), Ireland (51%) and Poland (46%) are the European markets where the highest proportions of businesses predict either substantial or total change.

The positive outlook across Europe is fuelled equally by external and internal drivers. The main internal contributors identified are investment in technology (30%), a motivated workforce (28%), introduction of new products and services (28%) and improvements in productivity (27%). The main external contributors are new markets opening up (37%), transformative technologies in their sectors (25%) and increasing interest in sustainability (24%).

79 %

Businesses across Europe are bullish about their prospects, with nearly four in five (79%) projecting growth over the coming 12 months

Expectations for future business growth

Expect sales to grow – Next year*
79%
Expect sales to grow – Next five years*
80%
Grow by 15% or more – Next year
18%
Grow by 15% or more – Next five years
19%
Grow by 6-14% – Next year
32%
Grow by 6-14% – Next five years
33%


Next year Next five years
Grow by 5% or less 29% 27%
Stay the same 9% 9%
Expect sales to shrink 10% 10%

* This is the sum of grow by 5% or less, 6-14%, 15% or more

What you need to know

  1. 1

    41% of European companies have become more optimistic about the business outlook over the past year – with 79% projecting growth in the year ahead.

  2. 2

    Among goods firms, agriculture, fishing and forestry are the most bullish, with 88% projecting growth in the next year. The automotive industry is the most conservative (74%).

  3. 3

    Around two out of five (41%) of firms in Europe are expecting their businesses to change totally or substantially in the next five years, lower than globally (50%) and the lowest proportion in any region.

What your business can do

  • Innovate to grow. Improving the quality of products/services (29%) and investing in innovation (27%) are two of the top three strategies to mitigate for potential declines.
  • Make international expansion a key strategy. More large companies (41%), international operators (39%) and goods businesses (40%) are looking to new markets as a growth driver.
  • Transform your business processes. Companies anticipating sales growth of 15% or more also expect to totally or substantially change their business in the next five years.