SMEs Growing Increasingly Pessimistic: Investments and Hiring on Hold
July 2026 - Confidence among Flemish SMEs continues to decline. This is evident from the latest UNIZO SME Barometer for the second quarter of 2026. Entrepreneurs are grappling with rising costs, declining profitability, and growing uncertainty. As a result, many are postponing investments and hiring.
Only 30 percent of SMEs report currently having the financial flexibility to invest. The labor market also remains sluggish: nearly 9 out of 10 companies do not plan to hire additional staff in the coming months.
Profitability Is Under Pressure
For many business owners, margins continue to shrink. According to the barometer, the war in the Middle East is driving up costs for energy, transportation, raw materials, and supplies. As a result, about three in four SMEs are experiencing a negative impact on their profitability.
The biggest problem is that these extra costs can hardly be passed on to customers. Only 17 percent of business owners are largely successful in doing so. The rest see the higher expenses directly affecting their profitability.
Low Confidence in the Economy
Economic confidence also remains exceptionally low. Only 5 percent of business owners are optimistic about the Belgian economy. At the same time, nearly 60 percent are pessimistic about the coming months. It is striking that the number of business owners who describe themselves as very pessimistic has increased further.
In addition, about one in five SMEs fears it will have difficulty meeting its financial obligations.
Cash flow remains a concern
It is not only rising costs that are weighing on businesses. Late payments are also putting pressure on liquidity. For one in four SMEs, a significant portion of revenue is received later than agreed. As a result, businesses often have to pay their own suppliers before the money from customers hits their accounts.
According to UNIZO, the results show that many businesses today are primarily trying to stay afloat.
As long as margins remain under pressure and economic uncertainty persists, investments, innovation, and additional hiring risk taking a back seat.
