VIC TESTING AND CERTIFICATION LTD--Employment in European SMEs fully recovered from the 2008 crisis

SMEs are small and medium-sized enterprises. According to the annual report on EU SMEs, these companies are doing well. 2016 marks the third consecutive year of increases in EU SME employment and value added. For the first time since the 2008/2009 economic and financial crisis, EU SME employment exceeds the pre-crisis level.

See the SME performance review web page for a full overview of all the findings. These include the full report, executive report, infographics and country factsheets.

The 3 main performance indicators used to measure SME activity are the number of SMEs, the level of SME employment and SME value added(the gross income from operating activities after adjusting for operating subsidies and indirect taxes). In 2016, EU SME employment level surpassed the 2008 level by 0.6% and EU SME value added in 2016 was 11% higher than 2008. Employment recovery was most dynamic in services industries. In previous years, the main driver for SME recovery was exports but in 2016 recovery increased due to higher final demand (i.e. household and government consumption, exports of goods and services, as well as capital investment by households, governments and businesses).

Key 2016 figures

99.8% of enterprises in the EU-28 non-financial sector are SMEs
These SMEs account for 67% of total employment in the EU-28 non-financial sector
93% of these SMEs are micro SMEs that employ less than 10 people
They account for more than 80% of EU-28 employment in the ‘accommodation and food services’, ‘business services’ and ‘construction’ sectors

Overview of recovery by EU country in 2016 vs 2008

More than 3% SME employment growth in 7 EU countries (Malta, Croatia, Slovakia, Portugal, Cyprus, Lithuania and Luxembourg)
More than 5% increase in value added for 5 EU countries (Romania, Malta, Bulgaria, Croatia and Ireland)
Increases in all 3 SME performance indicators for 9 EU countries (Austria, Belgium, Finland, Germany, Luxembourg, Malta, Poland, Sweden and the United Kingdom)
Performance indicators are still below the 2008 levels for 6 EU countries (Croatia, Cyprus, Greece, Italy, Portugal and Spain)
13 EU countries show partial recovery in 1 or 2 of the performance indicators

Start-ups and scale-ups are important drivers of economic growth. On average, 9.2 % of firms with at least 10 employees in the EU ‘business economy’ were high-growth firms. Over 90 % of newly created firms are from traditional (i.e. non-ICT) sectors. Approximately 31 million are self-employed. They account for 14% of total EU employment and have a sizeable impact on the EU economy.

Forecast for 2017 and 2018

SMEs are expected to continue growing at a relatively steady pace in 2017 and 2018. By 1% in 2017 and 0.9% in 2018 for employment, and by 2.5% in 2017 and 3.8% in 2018 for value added. Pick-ups in inflation will partly contribute to the accelerated growth of value added.