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Contracting Blog

A Weaker Euro’s Effect on Contractors

29/06/2016

A Weaker Euro initially sounds like a bad thing, but is that really the case. The weaker Euro was actually welcomed by financial experts due to the anticipation that this would boost the economies and promote job growth.
International contractors have different concerns to think about than the average worker, this includes currencies of the countries of where they intend to work and how fluctuations may affect their take home pay and securing future employment.
Contractors are normally paid in the local currency of the location of their current contract so if that is a Euro country for the duration of their contract they are not likely to notice much difference with the pay.  This may change however when it is time to go home or especially when repatriating funds on a regular basis.  Fluctuations should be regularly monitored in order not to needlessly lose money.
The weakening of the Euro has had a different impact on various businesses due to a variety of factors and therefore when looking towards a new contract especially in Europe it may be worth contractors looking to see where the effects have impacted the most.  
Some of the areas affected are:-
  • Manufacturing where companies have a global presence has seen a shift from other countries to Europe due to the depressed currency in order to take advantage of reduced costs.  
  • Exports where the cost base is in Euro and the sales outside of Europe have seen an increase in profit margins, there has also been increased demand due to the goods being less expensive to foreign customers.  European manufactured cars in particular have seen a huge increase in orders from outside Europe.  
  • Oil and Gas companies have also benefited as wages and rent and other costs in Euros are lower whilst where the revenue is coming in in dollars it has provided a much needed buffer from the slump in prices.
 



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