MNI BRIEF: Firms See More Tightening In Pipeline - ECB Survey

High labour, production, and interest costs are weighing on euro area firms, the latest ECB Survey on the Access to Finances of Enterprises (SAFE) reports. Tightening financing conditions meaning most expect access to bank funds to deteriorate further over the coming months, but less than 10% of companies encountered major difficulties in running their business and service their debts over the previous six months.

Firms reported moderately increased turnover from April to September 2023, although profits were down 14% compared with the previous SAFE round, with selling prices seen increasing by 3.7% over the next 12 months versus 6.1% previously. Just 5% of firms reported an increase in the need for bank loans, while at 6% the financing obstacle indicator for all firms remained at a similar level. Among the 27% of firms applying for a bank loan, 10% reported obstacles - little different from the previous survey round.

MNI spoke recently to the ECB economists who complied the SAFE survey (MNI PODCAST: ECBSpeak-ECB To Include CPI Views In SAFE Survey)