The European Economic Survey 2025 (EES2025), conducted by Eurochambres, the European Association of Chambers of Commerce and Industry, based on insights from 42,000 companies represented by chambers in 27 countries, including the Latvian Chamber of Commerce and Industry (LCCI), reveals that European businesses are preparing for another challenging year. High labour costs, persistent skills shortages and a growing regulatory burden are cited as the main threats to Europe’s already fragile competitiveness.

While survey results in Europe point to a slight improvement in business confidence and export prospects in 2025, the overall impression is one of stagnation rather than the growth that is so necessary to revive Europe’s competitiveness. Employment and investment forecasts are even more worrying, promising modest domestic growth, which is a small glimmer of hope.

Latvian companies have identified labour costs and a shortage of skilled labour as the main economic challenge in 2025, followed by bureaucratic and administrative burdens. The availability of energy and raw material prices and financing conditions are also seen as very high challenges.

Katrīna Zariņa, Member of the Board of the Latvian Chamber of Commerce and Industry, Director of Foreign Affairs, assessing the results for Latvia in the survey, says: “Although 2025 is forecast positively from the point of view of attracting investment, it has to be said that entrepreneurs in Latvia do not forecast growth in foreign markets in the coming year and the forecasts for activity in the domestic market are not the most encouraging either. This assessment by entrepreneurs of their export performance and domestic market performance should serve as a wake-up call for policy makers to work even more ambitiously to improve the business environment and respond to the challenges identified by entrepreneurs.”

The September 2024 Draghi report on competition says Europe’s economic performance is lagging. “The Eurochambres Economic Survey 2025 highlights that much needs to be done to reverse this trend. “Eurochambres President Vladimír Dlouhý put it simply: “We have reached a business tipping point. The current approach of EU policy makers of ‘regulate first, deal with the consequences later’ must be stopped immediately. The new European Commission and all legislators must focus on ways to encourage our businesses to invest, employ, innovate and seize opportunities in the Single Market and globally.”

EES2025 policy messages:

• Increase funding and simplify regulation. Strengthen financial support and regulatory frameworks to encourage investment, help businesses grow and control labour costs.
• Cut red tape. Aim for a 35% reduction in the cost of doing business for SMEs and remove barriers to entry into a smoother, stronger Single Market.
• Build a skilled workforce. Attract the best and brightest, support lifelong learning, provide EU-wide funding for skills upgrading to be ready for the challenges of the future.
• Accelerate digital transformation. Promote the integration of digital solutions and artificial intelligence to rationalise costs and meet productivity targets faster.
• Invest for the future. Invest in modern, renewable energy infrastructure that provides affordable and reliable access to clean energy.
• Ensure market integration. Capitalise on the potential of the Single Market and promote conditions favourable to international trade.

Background:

• EES2025 report: https://www.eurochambres.eu/wp-content/uploads/2024/11/EES2025-Report.pdf
• EES2025 infographic: https://www.eurochambres.eu/wp-content/uploads/2024/11/EES2025-Infographic-800-%C3%97-2000px-3.pdf