According to the European Central Bank (ECB), the 30th round of the 'Survey on the Access to Finance of Enterprises' (SAFE) indicates that in early 2024, Euro area businesses experienced greater difficulty in securing financing, though the challenge was less severe than in late 2023.
Furthermore, firms reported a decreased need for bank loans: down to a net percentage of 1% from 4%. Simultaneously, fewer firms reported a deterioration in the availability of bank loans.
Expectations for the prices companies will charge for their products and the wages they will pay over the next year have both decreased to increases of 3.3% and 3.8%, respectively. The surveyed businesses also reported an increase in turnover and optimism about developments in the next quarter, with declining expectations for annual inflation.
The report suggests that Euro area businesses perceive the economic outlook to be the main factor hindering external financing, albeit less so than in the previous survey round. It is also worth mentioning that the firms reported a decreased aversion to risk and an increased willingness to lend among banks, showcasing an overall improvement in sentiment.
Ultimately, the survey highlights a shift towards more optimism among businesses about future financing and economic conditions, despite ongoing challenges.