A survey conducted by the European Central Bank revealed that eurozone companies are facing a growing slowdown amid intensifying competition with their Chinese counterparts, amid declining business confidence due to US tariffs.
The survey, which included 72 entities operating in the region, reported a slowdown in activity in recent months due to escalating geopolitical tensions and tariffs, which negatively impacted investor and consumer confidence alike.
The companies warned that US tariffs pose a direct threat to growth, while Chinese products play an increasing role in stifling European competition, particularly with the redirection of Asian exports to Europe at the expense of the US market.
The report indicated that this trade shift has so far affected intermediate goods without a significant impact on final consumer prices, but it is expected to expand in the coming period.
On the wage front, companies expect salary growth to slow from 4.5% last year to 3.3% this year, and then to 2.8% in 2026
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