European SMEs Hit by Financial Crisis

According to the European Union report SMEs have a major role in contribution to macro economic growth.

Between 2002 and 2008, SMEs in the EU-27 increased by 2.4 million (13%), whereas LSEs grew by 2,000 enterprises (5%). in terms of emplyment, the jobs in SMEs increased by 1.9% annually, while in LSEs it was 0.8%. on the whole 9.4 million jobs were created in the SME sector during 2002-2008. the development in SME sector was across the old and new mwmber countries. The average enterprise size was found to be 6.5 in old member countries and 6.0 in new member countries in 2008.

The dynamic development of the SME sector in 2002-2008 was a widespread phenome non across the EU, including old and new Member States.In 2008, average enterprise size was 6.5 in the former and 6.0 in the latter region.

With the effect of financial crisis, the positive developments came to halt, as production in EU-27 SMEs showed a decline of 5.5% in 2009 from 2008.

In other countries, like, the United States, for instance, the number of enterprises showed a decline of 0.6% in 2008 to 2.2% in 2009.

According to Ecb survey, 28% of the SMEs reported insufficient market demand as major obstacle, while 19% cited access to finance.

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