International companies are increasingly optimistic about Belgium as a business and investment destination, according to a new survey conducted by the American Chamber of Commerce in Belgium (AmCham Belgium) and A.T. Kearney, as the country prepares for the next election cycle.
“This third edition of the Business Barometer clearly indicates that Belgium’s investment climate benefits from increased confidence by international businesses,” said Yvan Jansen, Partner at A.T. Kearney.
The improving outlook for Belgium is reflected in investment decisions: a growing share of companies plan to expand their Belgian-based operations, compared to previous years. Investors remain attracted by Belgium’s historic strengths – location and talent – but more generally, investment decisions are now being driven by growth prospects, as companies shift their focus to customer needs and innovation, after a period of cost saving.
Moreover, job creation is accelerating, perhaps reflecting the positive impact of the tax shift and index jump. More companies expect to create jobs – and, on average, more jobs – than in any previous edition of this survey. The amount of companies that expect to create more than 50 jobs has tripled since 2016.
- 33% of survey respondents indicate the Belgian investment climate has improved in the past three years, compared to neighboring countries, nearly twice as many as in 2014;
- 59% of respondents plan to expand their Belgian-based operations within the next three years, a slight improvement over 2016 but more than double the 2014 results; and
- 80% of those companies planning to invest expect to create jobs.
Despite this overall positive momentum, Belgium struggles to attract greenfield investments, and many survey respondents still find neighboring countries, such as the Netherlands (45%) and Germany (29%), to be more attractive. “We are aiming at a moving target. The competition is also improving, and so Belgium’s challenge is to outpace and outperform these countries,” said Marcel Claes, Chief Executive of AmCham Belgium.
In particular, the surveyed companies cited labor costs (67%), administrative complexity (48%) and mobility & congestion (33%) as investment deterrents. A new factor in the persistently high cost of labor is perhaps the growing talent shortage, as companies compete to attract workers with the right skills. “We hope the next government will carry forward the positive momentum and address these concerns with bold ideas and decisive action,” added Claes. AmCham Belgium will present new policy recommendations to improve Belgium’s competitiveness in the next edition of our Priorities for a Prosperous Belgium, scheduled for release in early 2019.