Eurozone businesses optimistic about future of region

30 August 2017

With the Euro reaching an 8 year high against the Pound, Eurozone businesses are increasingly optimistic about the future of the region, as growth picks up and the threat of reactionary nationalism seems to have receded following defeats for populists in most of the general elections held across the continent in 2017. Growth remains the principal concern now, even though recent figures have reduced concern on last year. Meanwhile migration has taken a back seat as the primary concern in the region, and further economic integration is generally favoured.

Concern among UK businesses regarding the effect of Brexit on their operations continues to be voiced, with migration, export tariffs and financial services passporting areas of noted concern. To better understand how businesses on the other side of the British/French Channel are facing up to the challenges posed by Brexit, as well as other macroeconomic factors in the region, Grant Thornton interviewed 2,500 businesses across 36 countries as part of its International Business Report (IBR).

Levels of optimism had been hit hard following the referendum to leave the European Union, falling from around 75% optimistic, to less than 50% in Q2 2016. Q3 2016 saw another low-point, before falling to the lowest point recorded in Q1 2017. Eurozone respondents were somewhat more gloomy prior to the decision to leave, with optimism at around 30% from Q3 2015 to the referendum result. However, sentiment has since improved, with net optimism increasing to almost 50% by Q1 2017.

Net optimism

Britain's currency tumbled to 1.075 against the Euro on Tuesday morning, as experts said markets appear to think Brexit will turn out to be a "shambles", the lowest the Pound has fallen in 8 years. A number of economists have since forecast that the two currencies could reach parity by the end of 2017, while the Euro’s own momentum has seen it break the 1.20 US dollar mark for the first time since 2015. While most pundits have focused on the drops in confidence in the US regarding the increasing threat of nuclear war with North Korea, and in the UK regarding the third round of tumultuous Brexit talks between Britain's David Davis and Michel Barnier, however it is also a reflection of growing confidence throughout the EU, following an aversion of political turmoil in the French and Dutch general elections, with the same result likely in Germany now too.

Researchers from Grant Thornton noted that businesses across the Eurozone have faced, and will continue to face, various kinds of crisis however – particularly in Italy and Greece. The form continues to have high levels of public debt at around €2.7 trillion or 133 percent1 of the total economy, its banking sector continue to deal with NPLs, while large dependence on small businesses mean that access to capital markets remains out of reach for many. The economy has grown by 0.9% in the most recent quarter, suggesting a possible recovery period. Greece meanwhile, is also in a fragile state of recovery – following years of chronic uncertainty, and crippling debt repayments enforced by the Troika of the World Bank, the IMF and the European Commission.

What is the single beiggest threat to the economic stability of the EU

Concerns understandably remain regarding Greece and Italy, with Italy’s banks still working to sell off bad debt, placing strain on their respective recovery. Respondents were asked to identify the biggest threats to the economic stability of the EU, low growth continued to hold the top spot – although improvements to the region growth saw concern fall from 24.8% last year. The rise of nationalist political parties increased significantly, up from 11.6% last year to 20.3% this year. The increase reflects a period of uncertain elections following strong performances by the far-right in Hungary, Austria and Poland prior to 2017. However in Western states – including France, the Netherlands and even including the UK where the anti-migrant UKIP lost all their Parliamentary seats – nationalists suffered massive setbacks at the polls, with Germany still to vote later in 2017.

The issue of migration, which could still see a hard-right revival across the EU, appears to have become less of a concern, falling from 10.4% last year to 4.3% this year, while migration within the EU has fallen from 3.8% to 1.8% - reflecting the changes in refugee policies. Concerns regarding national debt have meanwhile increased, up from 17,2% to 13.5%, while high unemployment threats have receded slightly on last year, falling from 19.2% of respondents to 16.9%.

The Brexit effect

EU businesses are relatively divided when it comes to the effect of the UK leaving the EU, on the wider EU. In general, respondents believe that some kind of deal will be struck with the UK, and trade will not revert to WTO rules, while the lowering rate of the Pound has offered a growing number of opportunities for investment in Britain. However, a large number (38%), also believe that the exit may lead to a two-tier EU membership model – which could have wider consequences on the European project. A quarter believe the UK leaving will have no impact, with 18% say that the exit will result in a stronger European Union.

Impact of Brexit on Europe

In terms of the continuing separation negotiations, German business leaders are more positive about the emergence of a mutually beneficial deal than UK respondents, at 45% and 39% respectively.

The vast majority of business respondents are positive about the Eurozone project, 92.1% of respondents would like to stay within the Eurozone. The kind of integration differs somewhat between different member states however. Although, across all members, 44% would like to see further political integration, 63% more economic integration and 14% no further integration.

Future European Integration

Italy is the keenest to see further political integration, at 76% of respondents, while Finland is the most opposed at 20%. German respondents are relatively positive, at 55% of respondents. In terms of economic integration, Ireland and Malta are the most optimistic, at 78% and 71% respectively, while Greece and Finland are the least positive, at 46% and 50% respectively.


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Project management industry adds £156 billion of value to UK economy

15 April 2019

Project management has grown into one of UK’s largest areas of business over the past decade, amid the increasing ‘projectification’ of work. With the gross value added to the UK economy by project management estimated to be £156 billion, this trend is likely to continue in the coming era.

Despite the huge success of project management in recent years, until now there has been relatively little data available on the size of project activity. As a result, there has been a great deal of debate on things like the number of people involved in the sector, the number of projects, and how it contributes to economic output. Due to this need for clarity, APM, the UK’s professional body for project management (the largest organisation of its kind in Europe, with 28,000 individual members) commissioned economists from PwC to shed light on the industry's economic impact.

The research concluded that the profession makes a more significant contribution to the UK economy than the financial services sector. 2.13 million full-time equivalent workers (FTEs) were employed in the UK project management sector, generating £156.5 billion of annual gross value added (GVA). In comparison, the financial services sector contributes £115 billion, and the construction industry adds £113 billion.

Gross value added to UK economy

Commenting on the discovery, Debbie Dore, Chief Executive of APM said, “Project management runs as a ‘golden thread’ through businesses, helping to develop new services, driving strategic change and sector-wide reform.”

Who is a ‘project manager’?

To reach these estimates, PwC’s researchers used detailed models to map out the value of project management activity. They ultimately defined relevant ‘projects’ as “temporary, non-routine endeavours or rolling programmes of change designed to produce a distinct product, service or end result… [with] a defined beginning and end, a specific scope, a ring-fenced budget, [and] an identified and potentially dedicated team with a project manager in charge.”

Building on this, they then went on to define what the act of project management actually is. The job consists of applying “processes, methods, knowledge, skills and experience” so that clients can meet their objectives and bring about planned outputs or outcomes. The analysts added that this includes “initiating the project, planning, executing, controlling, quality assuring and closing the work of an identified and dedicated team according to a specified budget and timeframe.”

Importantly, it should be noted that the profession is not exclusive to only roles explicitly labelled as ‘project manager’, but to any role where specialist project management skills are used. This means that across sectors these roles can have very different titles, from the self-explanatory contract managers of procurement, or the campaign managers of advertising, to the likes of festival co-ordinators in the events sector, and many more. The roles in question also span all strategic levels of the profession, from strategic to tactical and operational positions.

Gross value added of project management profession

From a sector perspective, the financial and professional services, construction and healthcare industries make up almost two-thirds of the total project management GVA. At the same time, understandably, the UK Government has a huge project portfolio, which further drives the size of the GVA the sector contributes, thanks to megaprojects like HS2 and Crossrail.

Commenting on this to the report’s authors, Oliver Dowden, Minister for Implementation remarked, “Project delivery is at the heart of all Government activity, whether it’s building roads and rail, strengthening our armed forces, modernising IT or transforming the way government provides public services to citizens. Getting these projects right is essential if we are to ensure that we build a country that works for everyone.”

Throughout 2019, 26 major government projects were delivered, representing a fifth of the overall Government Major Projects Portfolio (GMPP) of 133 projects. According to the IPA annual report 2017-18, these represented a whole life cost of £423 billion. In addition to this were a plethora of smaller scale projects, and those in early development.

Elsewhere, with the increasing digitalisation of the economy impacting entities of all shapes and sizes, IT and digital transformations tended to dominate the projects of the UK scene alongside new product development projects, with a respective 55% and 46% of organisations in the research sample having undertaken these types of project in the past year. At the same time, this varied across sectors, and unsurprisingly, in the construction and local government sectors, fixed capital projects were the main project type undertaken.


Looking to the future, 40% of business leaders expect project management will grow in the coming years due to the increased use of projects – or the ‘projectification’ of the UK. In a trend that has been witnessed elsewhere, organisations have to rapidly and continuously change in the digital age of business, driving the need for project management.

Outlook for project management services

An increased focus on value over cost – especially in the construction sector – and a forecast increase in the number of international projects are predicted to be key drivers of growth, according to the expert contributors. However, this will not happen in the absence of challenges; more than half of organisations expressed concern over the perceived impact of political uncertainty in the UK. Skills and capability shortages were also cited as a potential barrier by a third of organisations.

With regard to budgets, meanwhile, a third of those surveyed by PwC said they expect the size of project budgets will increase in the coming three years, while 40% anticipate a growth in project size. As the profession continues to mature, and as the recognition of the importance of good project management grows, it is expected that a greater proportion of project work will gain more distinct attribution to the profession itself, giving more recognition and appreciation to the role of the project manager.

Speaking on the findings of the study, Sandie Grimshaw, a Partner at PwC, concluded, “The project management profession is relatively new compared to some other professions, such as lawyers, teachers and doctors. However, as project management is a core competence vital to organisations in the UK, the profession is critical and will continue to grow in stature.”