Complex and Incoherent Regulation Puts Pressure on Europe’s Competitiveness

15 November 2023 / Report

In autumn 2023, The Conference Board Measure of CEO Confidence™ for Europe by ERT plunged back into negative territory to 42. Only six months ago confidence had appeared to be stabilizing at a low, but positive 53. The current survey was in the field from September 26 to October 11. A reading above 50 reflects more positive than negative responses.

CEOs in our report raise alarm that, for the foreseeable future, complex and incoherent regulation will have a detrimental impact on Europe’s global competitiveness and the majority are pessimistic about policymakers’ ambition to restore the EU’s regulatory coherence over the next three years. Moreover, an overwhelming 70% of CEOs are not confident that Europe’s administrative processes enable physical infrastructure projects needed for achieving its climate targets by 2030.

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The Conference Board Measure of CEO Confidence™ for Europe by ERT falls, from a barely positive 53 six months ago, to 42 in the second half of 2023. All three subcomponents of the confidence measure are in negative territory. The current level of confidence is only somewhat higher than it was in the first half of 2022, right after the start of the war in Ukraine.
A gloomy assessment of the current economic outlook is the main driver behind the fall in the overall measure. Only 15% of CEOs find that current business conditions have improved from six months ago, while 61% of respondents say they have worsened either moderately or substantially.
Only a small share of CEOs, less than 10%, expect economic conditions to improve in the short-term. This subcomponent of the overall measure drops from 49 six months ago to 42 in H2 2023.
In parallel with Europe, The Conference Board Measure of CEO Confidence™ surveys in the US and China were also completed in October. In the US, CEOs’ confidence fell from 48 in Q3 to 46 in Q4, with the majority expecting a recession over the next 12–18 months. On the contrary, confidence among China-based CEOs, despite losing significant steam from six months ago, remained in positive territory at 56.
Despite the fall in the overall measure of CEO Confidence, business leaders’ views on their own company’s sales, employment, and investment remained in positive territory for both inside and outside of Europe. Expectations for short-term prospects of these three key indicators are more positive for outside of Europe than inside.