28 November 2023

• Euro area firms signalled a continued increase in turnover, while higher labour, production and interest costs weighed on their profitability. Firms expect their turnover to increase further over the next six months.
• The share of financially vulnerable firms increased almost to the level seen during the coronavirus (COVID-19) pandemic.
• Compared with the last survey, firms expect a noticeably smaller increase in their average selling prices (3.7%, down from 6.1%) and wages (4.3%, down from 5.4%) over the next year.
• Firms reported a modest increase in their need for external funds, while availability deteriorated further, reflecting the transmission of monetary policy. As a result, the financing gap continued to increase at a moderate pace.
• A large net share of firms reported stricter price terms and conditions for bank loans. Despite tighter financing conditions, few firms reported obstacles to obtaining a bank loan.

In the latest round of the twice-yearly Survey on the…