• The EIB and the National bank of Belgium hosted a virtual conference to present the results of the EIB Investment Report and Survey (EIBIS) for Europe and the specific results for Belgium
  • Investment in Belgium was hit by the COVID-19 crisis and the outlook remaining very uncertain is the main barrier to investment
  • Belgian firms performed well in terms of innovation and digitalisation, but must do more for a low-carbon future to improve their competitiveness and to catch up with EU peers
  • EIB Vice-President Kris Peeters confirms EIB support in Belgium for economic resilience, green and digital recovery

The Belgium Financial Forum of the National Bank of Belgium (NBB) and the European Investment Bank (EIB) jointly hosted a webinar entitled “Investment for a sustainable recovery in Belgium” on Friday 30 April 2020. It was a timely opportunity for 700 representatives from all sectors and from the financial community to debate the short and long-term economic challenges facing Belgian businesses.

It was steered by the EIB Investment Survey for Belgium (EIBIS), which pointed out strengths, weaknesses and the challenges that Belgium firms are facing on the crucial path out of the pandemic. Entrepreneurs, financiers and experts shared views during a panel discussion on investment dynamics and investment needs in Belgium.

The pandemic has severely impacted investment activity in Belgium. Firms have to cope with substantial revenue losses that have affected their investment strategies. Assessing business needs and setting priorities is crucial for a rapid and solid recovery.

Kicking off the session together with Pierre Wunsch, BNB Governor, EIB Vice-President Kris Peeters said: Although recent news on the health front brings us hope, and we know that a rapid economic recovery is possible due to the nature of this crisis, uncertainty remains very high. As the EIBIS shows, uncertainty about the future is more often cited in Belgium than across the EU as the most important barrier to investment activity, which shows signs of recovery but still remains below pre-crisis levels. I must emphasise: the EIB stands ready as a trusted partner to support Belgian companies and authorities in these challenging times, helping them to implement their programmes and investment projects.”

Key findings point to increasing investment needs in the future – digital technologies wanted

The business investment outlook is very uncertain.  In 2020, the economy in Belgium was severely affected by the COVID-19 outbreak, as domestic demand suffered from restrictive measures and a large drop in confidence – only half of Belgian firms reported operating at or above full capacity and 20% expected as a long term impact a permanent reduction in employment.

As it did across Europe as a whole, investment also decreased and almost half of the firms in the survey (46%) reported that they still expect to invest less due to the pandemic. Around two-fifths of firms (39%) with investment plans for the current financial year plan to abandon or delay their investments as a result of COVID-19, a share which is slightly above the EU average (35%). These views point towards increasing investment needs in the future, and some 66% voiced a need to invest in digital technologies to tackle COVID-19’s negative implications.

Innovation is gaining momentum in Belgium

Almost half of all firms in Belgium (45%) developed or introduced new products, processes or services as part of their investment activities, with one-fifth (20%) having undertaken innovation that is new to the country or even to the world. Approximately two out of three firms (68%) have implemented, either fully or partially, the digital technologies they were polled on.

On the right path but can do better when it comes to investing for energy efficiency

80% of firms in Belgium have either “already invested” or “plan to invest” in the next three years in measures to tackle climate change (above the EU average). But it appears that a relatively lower share of Belgian firms (40% against 47% amongst EU peers) have invested in measures to improve their energy efficiency. This difference is also reflected in the share of the investment budget spent by Belgian firms (a low 7%) for this purpose compared to the EU average (12%). Belgian firms appear to have greater concerns about the impact of the transition to a low-carbon future on their supply chains, while they are more optimistic about this impact on their demand for products and their reputation.

Main barriers to investment

As in most EU Member States, the availability of skilled staff, uncertainty about the future and business regulations are perceived as the main barriers to investment. To that end, Belgian firms ask for more public investments in the area of professional training and higher education. Simultaneously, they stress the importance of investment in transport networks for their competitiveness and well-functioning markets. In comparison to EIBIS 2019, an increasing number of firms (50% vs. 36%) perceive the demand for products/services as a long-term barrier to investment.

Finance conditions appear to be of limited concern for investment in Belgium, except for small firms. But there is a consensus stating that Belgium should take advantage of the currently favourable finance conditions to reorient public spending towards infrastructure, skills and education to enhance productivity growth and inclusiveness.

This country overview was based on interviews with 480 firms in Belgium that took place between April and July 2020. The survey is part of the annual EIB Group Survey on Investment and Investment Finance (EIBIS), an EU-wide survey of 13 500 firms that gathers quantitative information on investment activities by both small and medium-sized enterprises (SMEs) and larger corporates, their financing requirements and the difficulties they face.

Together with the EIB Investment Report, the EIBIS provides an overview of the cyclical and structural dynamics behind investment and investment financing in Europe, thereby facilitating an in-depth understanding of the investment situation in each EU economy, namely in Belgium for this occasion.

See the Investment Survey reports:

Background information

EIB Group activity in Belgium reached €1.5 billion in 2020. The operations of the EIB itself amounted to €1.3 billion, bringing total EIB exposure to €32.4 billion or 6.8% of GDP. Projects financed included bringing safe drinking water and renewable energy to homes, major infrastructure such as the expansion of Port of Antwerp (one of the world’s biggest), all of the wind farms off the country’s coast, investments in healthcare and education, and the support of SMEs and mid-caps.