Cyprus High in International Trade, Lagging in Green Transition - EIB Investment Survey

Gender equality is a strong performer in Cyprus, according to the report

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POLITIS NEWS

The results of the annual survey that records investment trends, priorities, and challenges of European businesses, the EIB Investment Survey 2025, were published on Tuesday by the European Investment Bank (EIB). The survey, conducted in collaboration with Ipsos Public Affairs, is based on data from approximately 12,000 companies across all EU countries as well as the United States. The report’s key findings present a picture of resilience but also challenges, particularly in an environment of geopolitical uncertainty and economic instability.

As regards Cyprus, the country is among those with the highest percentage of companies participating in international trade, whether through exports, imports, or both. However, Cyprus lags behind in investments for climate adaptation and energy efficiency compared to other European countries.

Regarding investment trends and priorities, the survey shows that 86% of European companies made investments in the past year, a figure that remains stable compared to 2024 (87%). However, expectations for increased investment are more modest, with the net balance of companies anticipating growth falling to 4% from 8% the previous year.

Tariffs a source of concern

European companies focus primarily on replacement investments (43%) and less on expanding production capacity (26%), in contrast to US companies, where the corresponding figure is 37%. Some 35% of European companies’ investments are directed toward intangible assets such as research and development (R&D), training, software, and organizational processes, while 13% is allocated to the development of new products and services. Large companies and manufacturing firms show greater resilience in investment, while the construction sector is more cautious.

With regard to international trade and supply chains, the survey paints a picture of adequate integration of European companies into global trade, with manufacturing and large companies holding the highest positions. However, changes in tariffs and regulations are a significant source of concern, with 77% of US companies expressing worry compared to 48% of European companies. European companies adopt a more balanced approach, with only 7% reducing the share of imported goods and services and 19% diversifying or increasing the number of countries from which they import.

Cyprus tanks in green transition

On the green transition and climate action, 92% of European companies are taking measures to reduce greenhouse gas emissions, but Cyprus ranks last, with only 69% of companies investing in this direction. Only 20% of Cypriot companies have set targets for reducing emissions, the lowest percentage in the EU (EU average: 47%). European companies invest more in waste reduction, energy efficiency, sustainable transport, and green innovation. However, despite Cyprus’s high participation in international trade, its investments in energy efficiency remain below the European average.

Additionally, 68% of European companies have suffered losses due to extreme weather events such as floods, fires, or storms. Some 53% of European companies are taking measures to address natural risks related to climate change, compared to 55% in the US.

Regarding digitization and the use of artificial intelligence, 37% of European companies use AI, a figure similar to the 36% in the US, while Cyprus ranks sixth from the bottom at 23%. However, only 55% of European companies using AI apply it to at least two internal processes, compared to 81% in the US. This indicates that European companies could better leverage the benefits of AI by systematically applying it across a broader range of activities.

Gender equality

The main barriers to investment for European companies remain uncertainty (83%), lack of skilled personnel (79%), and high energy costs (75%). Some 16% of European companies benefit from policy support, primarily for the green transition (41%) and innovation (29%).

European companies lag behind their American counterparts in terms of women’s representation in senior management and company ownership, with Cyprus standing out for its strong performance in gender equality, ranking second in the EU and first in Southern Europe.

CNA

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