The assessments of sales by firms with 20 or more employees point to further growth in non-financial services and to a contraction in industry excluding construction over the first nine months of 2024. Manufacturing was mainly affected by the performance of exports, which reflected a weak manufacturing cycle in the euro area, particularly in Germany.
Firms expect both domestic and foreign sales to grow over the next six months; sales in Germany are predicted to fall further in the textile, clothing and footwear sector and in metalworking, though at a slower pace.
The number of hours worked continued to rise in services and slowed down in manufacturing; in both sectors, firms expect it to climb higher over the next six months. The employment outlook for 2024 as a whole remains favourable.
Demand for bank loans remained weak in the first half of 2024. Borrowing conditions, which had worsened significantly over the last two years, are seen as improving, but assessments of stability still prevail.
The investment plans laid out at the end of last year, which envisaged higher capital expenditure, were carried out as scheduled by most firms. For 2025, firms anticipate a further expansion across all sectors except for textiles, clothing and footwear. The adoption of generative artificial intelligence in business processes is expected to rise over the next 12 months.
Construction output is forecast to continue to grow in 2024, albeit less than last year, driven by public works. A further expansion is expected in 2025.
