May 26 (SeeNews) - Companies in Central, Eastern and Southeastern Europe need to invest more in state-of-the-art machinery and equipment, and in research and development, the European Investment Bank (EIB) said on Friday.
Investment gaps are a result of shortages in terms of state-of-the-art machinery and equipment and energy efficient corporate building blocks, EIB said in its Investment and Investment Finance survey adding that availability of staff with the right skills is a prevalent issue.
The survey was conducted from July to November of 2016. The results are weighted by value-added, reflecting firms’ contributions to the economy. In the CESEE EU Member States, the survey covered 4 881 firms in 11 countries.
"The EIB Investment Survey (EIBIS) shows that the investment outlook in the CESEE region has improved in recent years. On the other hand, we see that uncertainty, the lack of skilled staff, and business and labour market regulation continue to represent major barriers for investing in this region," EIB vice-president Vazil Hudak said in the statement. "The region would benefit from further upscaling of the 'quality' of capital stock and more support for R&D. The survey conclusions will help the EU bank to contribute to a policy response that properly addresses the needs of businesses, promoting investment in the EU."
For 2016, more firms expected an expansion in investment than a contraction, which was in line with the EU average. The strongest investment expectations were in Croatia, Hungary, Poland and Slovakia, while the weakest expected investment activity was in Lithuania, Estonia and Latvia. Capacity expansion plans, usually the highest investment outlay, feature more prominently among firms in Croatia (38% of firms), Romania (33%) and Slovakia (30%).
The survey findings indicate that despite the fact that the share of companies investing in the region in 2015 was below the EU average, corporate investment activity was particularly strong in Slovenia, the Czech Republic and Croatia, standing above or at the EU average. The outlook was positive overall, with almost all countries in the region showing more firms expanding investment plans in 2016, rather than scaling them back.