American and German businesses sustain Asian and U.S.-based corporations
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Europe's heavyweights are sinking while their American and Asian competitors surge ahead. A study by EY, an auditing and consulting firm, reveals the financial statements of the 1000 largest listed companies worldwide. Top US firms snagged an average 4.5% increase in turnover in 2024, with Asian companies following closely at 3.2%. Europe's big players, on the other hand, suffered a painful 1.1% dip.
The concerning trend continues in profits. Asian companies posted an impressive 19.5% increase, while US companies managed a 8.2% boost. European companies struggled, with a 6.5% decrease in profits. Ouch! Germany's corporate giants felt the brunt with a 3.1% decrease in turnover and a gut-wrenching 8.5% plunge in profits.
The US dominates the list of the 1000 largest listed companies, with 317 companies, followed by China with 137 and Japan with 110. Germany lags behind in 4th place with 43 companies.
It's a grim forecast, according to EY expert Jan Brorhilker. Europe's once-powerful industries are now struggling to keep up due to weak sectors, political tensions, and trade barriers. The automotive sector, for instance, is undergoing cataclysmic changes, which only aggravated by US trade policy.
The tech sphere, however, is a different story. US tech corporations reign supreme with Apple, Alphabet, Microsoft, and Nvidia among the most profitable companies. European corporations struggle to match this dominance, claims Brorhilker. Only a select few can sample the tech elite.
The oil company Saudi Aramco ranked as the world's most profitable with an operating profit of approximately $191 billion. Shell, Europe’s highest-earning oil and gas company, ranked 13th. Deutsche Telekom was the first German company in the global profit ranking, earning around $26 billion (19th place).
Retail titans Walmart and Amazon, along with Saudi Aramco, reigned supreme in the largest listed companies in 2024. German contenders, including Volkswagen, Mercedes-Benz, BMW, and Deutsche Telekom, found themselves amongst the top 50 in the turnover ranking.
🗺️ Key Points:- While American and Asian firms outdo European corporations in growth, a combination of market trends, economic performance, sectoral strengths, and valuation play a part.- German corporations face unique challenges related to economic structures, specific industries, and the global economic landscape.
Sources
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Community policy must address the gap between Europe's corporate sector and their US and Asian counterparts, given the stark contrast in financial growth and profitability. Technology, particularly in the tech sphere, is a domain where European corporations are struggling to match US dominance, highlighting the need for a comprehensive employment policy focused on technological advancement.
