00:00Where and why are European companies freezing their spending?
00:08European businesses are pulling back on their investments.
00:11The EU's business investment rate dropped to 21.8% in Q4 2025,
00:17the lowest point in more than a decade.
00:20The business investment rate basically measures how much money
00:23companies are putting back into things like machinery and buildings
00:27compared to the total value they create.
00:30We're talking about non-financial corporations,
00:33so regular businesses like hotels, factories, supermarkets and so on.
00:37So why are companies pulling back?
00:40Some 90% of large businesses surveyed blame their hesitance to spend
00:44on current weak demand, according to the European Central Bank.
00:48But they're also greatly worried about low profitability,
00:52regulatory burdens and labour costs cited by more than 80% of firms.
00:58Geopolitical tensions also took a toll, particularly on manufacturers hit by tariffs and war disruption.
01:04They also said that unpredictable climate regulations are weighing on their long-term plans.
01:10Strikingly, some of the lowest investment rates came from Europe's main business hubs,
01:15Luxembourg, Ireland and the Netherlands, all less than 17%.
01:20At the same time, Hungary and Croatia reported the highest rates across the bloc,
01:25both slightly more than 28%.
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