A new EU wide survey paints a picture of “fragile stability” for Europe’s small businesses.
It says that business conditions remain “weak and investment prospects continue to be affected by uncertainty”.
That is the verdict of Simona Amati, Director, Economic and Fiscal Policy.
Amati was speaking during the presentation of the autumn 2026 SME Business climate index.
The Autumn 2026 SME Business Climate Index remains stable for the third consecutive semester.
However, this figure masks growing uncertainty.
“Following multiple crises, most recently the surge in energy prices from the war in the Middle East, companies remain cautious about their future business situation”, Amati explained.
“The effects of the conflict weighed on SMEs’ business performance. Key indicators, particularly turnover and orders, fell short of expectations. Meanwhile, prices rose more than anticipated, especially in construction and manufacturing, suggesting growing cost pressures”, she continued.
Manufacturing remains the most affected sector for the eighth consecutive semester and has yet to recover from the 2022 energy shock.
The easing of the conflict and the resulting decline in oil prices over the summer brought some relief, improving expectations for the second half of the year and suggesting that the downturn may be losing momentum.
“But negative developments still dominate companies’ business environment”, Amati noted.
SMEs expect weak business conditions to continue, with a particularly negative impact on investment prospects. Even with price increases expected to slow down, possible higher labour costs could weigh on business performance, especially for labour-intensive sectors such as personal services.
“SMEs must have the confidence and the means to invest. We call on policymakers to improve access to affordable finance, increase the proportionality and predictability of rules, and ensure sufficient funding for SMEs in the next Multiannual Financial Framework”, Amati said.
