Nearly half of small and medium-sized enterprises (SMEs) based in Brussels are considering leaving or already have plans to move, a recent study has found.
According to a report by Brupartners, the main socioeconomic advisory body to the Brussels-Capital Region Government, 6% of SMEs are currently in the process of exiting the Belgian capital while 39% are considering moving.
The main reasons for leaving cited by company managers include the city’s poor public transport system, its high tax rate, dirtiness, and a general lack of security.
The survey also found that 52% of company owners believe that their quality of life has declined in the past six months, while 53% reported decreasing profit margins over the same period. SME managers blamed high energy prices and rising labours costs as the two main causes of their financial difficulties.
A predictable crisis
The Brupartners survey is not the only study to paint a bleak picture of Belgium’s business climate in recent months. Statbel, Belgium’s office statistics office, recently reported that bankruptcies across Belgium are up 11.4% compared to October 2022. In June, Belgium posted its highest monthly bankruptcy rate since 2018.
Companies’ financial woes were hardly unforeseen. Late last year market analysis firm GraydonCreditsafe specifically predicted that high energy prices and government-mandated wage indexations would force numerous Belgian businesses to close in 2023.
“The economic shock of Covid-19 has not yet been fully digested, while the shocks of energy prices and wage indexation are looming,” explained Eric Van den Broele, the Director of Research at GraydonCreditsafe.
In an especially prescient prediction, Van den Broele forecast that SMEs were likely to suffer the worst effects of the developing economic crisis.
“The smaller a company is, the less it will be able to pass on the increase in costs to its customers,” he explained. “In the retail trade we can expect a wave of closures, but especially takeovers, with big players swallowing up the smaller ones. Otherwise, we risk ending up with empty spaces in the city centres.”
GraydonCreditsafe’s analysis comes against the backdrop of a deteriorating business climate across much of the rest of the EU. According to a recent analysis by Eurostat, the EU’s official statistics office, bankruptcies in the bloc are currently at record levels.
Source: Brussels Times
