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    Conducted in the summer of 2022, the new wave of the EIB’s Investment Survey shows that EU firms navigated the pandemic better than expected. However, it also gives insight into the massive new shocks that are testing their resilience.

    Looking back over the previous year, 81% of EU firms said they invested, similar to the year before. While that level is slightly lower than before the pandemic (around 86%), EU firms still expected to invest more over the course of 2022 – with one-fifth of firms expecting to increase investment. Firms have also made progress in investing to tackle climate change, for both mitigation and adaptation. Europe still needs structural transformation, however, as it is falling further behind the United States in innovation.

    Firms’ outlook on the investment climate, however, has deteriorated starkly, driven by the invasion of Ukraine, the energy crisis, uncertainty and decelerating global growth. Volatility and the tightening of financial conditions increasingly pose additional risks for corporate investment.

    • A large majority of firms say that uncertainty (78%) and a lack of skills (85%) are hampering investment.
    • The share of firms that say rising energy costs are constraining investment has surged, to 82%.
    • The share of firms that say energy costs are a major barrier to investment varies depending on the country, from 24% in Finland to 81% in Greece.

    About the report

    The EIB Group Survey on Investment, which has been administered since 2016, is a unique, annual survey of some 13 000 firms. Data was collected from April until July 2022 from firms in all EU Member States. The survey also includes a sample of firms in the United States. The survey collects data on firm characteristics and performance, past investment activities and future plans, sources of finance, financing issues and other challenges that firms face, such as climate change, digitalisation and international trade.

    COVID-19 impact

    The pandemic was a major shock for EU firms, but policy support was sizable and helped them to survive and transform. However, the impact was uneven across firms and sectors. For one-third of firms, sales didn’t decline during the pandemic, and these firms also expected higher sales in 2022 than in 2019. At the other end of the spectrum, about half of firms said sales dropped in 2020 and/or in 2021. Of those firms, 13% still did not expect sales in 2022 to rebound to levels before the pandemic.

    Overall, roughly 60% of EU firms received some form of financial support during the pandemic, mostly through subsidies or other assistance that does not need to be paid back. Policy support was more likely to reach firms that saw sales decline. Around 10% of EU firms say they were still receiving financial support at the time of interview.

    Innovation and digitalisation

    Policy support was instrumental in enabling firms to transform. 63% of firms said they took some sort of action in response to the pandemic. The number of firms that acted or invested in digitalisation grew to 53% in 2022, compared with 46% in 2021. Furthermore, the share of firms that began shortening their supply chain nearly doubled (to 19% from 10% in 2021). A large majority, 69% of EU firms, said they used at least one advanced digital technology, almost as many as in the United States (71%).

    Overall, the pandemic and other recent shocks are pushing firms to innovate, but EU firms still lag their US counterparts.

    • About one-third (34%) of EU firms developed or introduced new products, processes or services as part of their investment activities, similar to the share in 2021 (36%).
    • The innovation gap with the United States is growing over time, as 53% of US firms introduced new products, processes or services in 2022.
    • Finland had the biggest share of firms that were innovating (52%), followed by Denmark and Ireland (50% each). Spain (21%) and Slovakia (14%) had the lowest share of firms innovating.

    Climate change and energy efficiency

    The share of EU firms that consider the imposition of stricter climate standards and regulations to pose a risk or to present an opportunity remained fairly balanced (at around 30% each), while nearly 40% of EU firms did not expect the transition to affect their business. Around 57% of EU firms are worried about the physical risks posed by climate change, but only one-third have taken action to protect themselves against these risks. EU firms, however, are actively improving their green credentials, with about 90% of EU firms having taken measures to reduce their greenhouse gas emissions.

    About 53% of EU firms have already invested or are currently investing in climate change more broadly, and more than half plan to invest over the next three years. Compared to the United States, the European Union continues to forge ahead, in the share of firms that have invested in tackling climate change and in the share of firms planning to make such investments over the next three years.