Economy in Focus #5 – Four key challenges that European companies face

In the 5th edition of Economy in Focus, Intrum’s Senior Economist, Anna Zabrodzka-Averianov, examines the four key challenges that European companies face, including revenue disruptions, inflation fears, wage-setting struggles, and cost-cutting measures. Published in June 2023.

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Revenue disruptions remain a key concern

As customers struggle to meet financial obligations, European companies expect continued disruptions in revenue. This is compounded by rising inflation and interest rates, creating a challenging financial environment.

Inflation fears linger despite interest rate hikes

Even with significant monetary tightening, inflation remains persistent. European companies are concerned about the long-term effects, with 7 in 10 businesses fearing inflation will continue for at least a year.

Wage-setting pressures escalate

Record inflation has driven European employees to negotiate higher-than-normal pay rises. SMEs and large enterprises alike are facing mounting pressure to balance rising wages with the need to control costs.

Anna Zabrodzka-Averianov, Senior Economist at Intrum

Comment from Intrum's Senior Economist:

"Inflation has maintained its grip on Europe, and businesses are feeling the strain. Balancing talent retention, rising wages, and economic risks is becoming increasingly challenging."

Which challenges should you be prepared to face?

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Previous editions of Economy in Focus:

Economy in Focus #4 – Employment remains strong in Europe

In the 4th edition of Economy in Focus, Intrum’s Senior Economist, Anna Zabrodzka-Averianov, discusses Europe’s resilient labour market amidst economic challenges. The report highlights stable employment, falling real wages, and rising consumer confidence. Published in April 2023.

Economy in Focus #3 – Downturn on the housing market

In the 3rd edition of Economy in Focus, Intrum’s Senior Economist, Anna Zabrodzka-Averianov, provides insights into the downturn in Europe’s housing market, with a particular focus on the impact of rising interest rates on household debt. Published in February 2023.

Economy in Focus #2 – Generation X worst off

In the 2nd edition of Economy in Focus, Intrum’s Senior Economist, Anna Zabrodzka-Averianov, explores the record-low consumer confidence in Europe, the impact of rising inflation, and how Generation X is most affected. Published in December 2022.

Economy in Focus #1 – Inflation reaches highest level in decades

In the 1st edition of Economy in Focus, Intrum’s Senior Economist, Anna Zabrodzka-Averianov, discusses the record-high inflation levels across Europe, the sharp rise in energy prices, and the impact on consumer confidence. Published in September 2022.