Four in ten businesses globally say the eurozone crisis has had a negative impact on their business, according to the latest Grant Thornton International Business Report (IBR). This is estimated to have wiped US$2trillion off revenues globally. With the crisis still rumbling on, the research also highlights the long-term damage to the prospects of the EU as businesses consider doing less trade in the region in the future.
According to the IBR, the impact of the eurozone crisis on business revenues has been severe: more than half of those negatively affected (54%) say their revenues have dropped by more than 3% as a result of the crisis, and one in three (32%) say they have taken at least a 6% hit. In the United States, the worlds largest economy, 11% of businesses say the crisis has caused their revenue to fall by 10% or more.
Paul Raleigh, Global leader of growth at Grant Thornton, said: "It's tricky to pin an exact figure on the total revenue lost as a result of the eurozone crisis. But our calculations, based on the IBR results and the proportion of global GDP accounted for by corporate revenues, suggest that businesses have lost close to US$2trillion as a result of the crisis.
"Clearly the crisis is doing far more than stifling sentiment in the region. Businesses are also losing money and their growth prospects are suffering, not just in Europe but across the globe."
Although businesses in Europe have suffered the most acute effects of the eurozone crisis, the IBR reveals that the impact has spread widely and had considerable effect in other regions. Around one in three business leaders in the BRIC economies (36%), Asia-Pacific (34%), North America (31%) and Latin America (30%) cite a negative impact.
Perhaps more worryingly, 17% of businesses globally now say they are less likely to do business in Europe as a result of the crisis. This compares with just 10% when businesses were asked the same question about the Middle East & North Africa in 2011 following the Arab Spring. Some of those most likely to stay away from Europe are businesses from Turkey (30%), China (25%), South East Asia (24%) and Latin America (18%).
Interestingly, many businesses in Europe are thinking the same thing; 27% of businesses within the eurozone are now less likely to do business with other members of the currency union.
Paul Raleigh added: "The concern is that the longer the crisis drags on, the greater the long-term damage to the reputation of Europe as a trading partner. If businesses in some of the fastest growing economies of the world begin to look elsewhere for the technology and skills to help them grow, then Europe will find it even harder to move past its current problems.
"However, the willingness of eurozone businesses to look further afield for opportunities is encouraging. And it is also worth stressing that Europe remains home to the worlds largest single market, has enviable infrastructure and boasts some of the most dynamic business environments in the world . The key is a swift resolution to the crisis which will remove the uncertainty and give businesses, in Europe and worldwide, the confidence to begin investing in the future and return consumer confidence."
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Businesses negatively affected by the eurozone crisis were asked: "By how much has your revenue fallen as a result of the eurozone financial crisis?" Total impact was then calculated at the global level using the ratio of US and UK corporate revenues to GDP of roughly 2:1.
John Vita, Director, public relations and external affairs, +1 312 602 8955