There are three main conclusions of the first report of the Observatory of Business Margins presented this Monday by the Ministry of Economy. First of all, the vast majority of business sectors have managed to recover the level of margins they had before the pandemic. The most detailed photo is completed with an energy sector with the highest margins, up to 25% in the case of gas and electricity, and at the other extreme, a food chain that has not yet returned to pre-Covid levels.
The energy sector is the one that obtains the highest margins in the first quarter of the year, with “abnormally high” levels, they say from the observatory. Its intense recovery after the covid crisis and the fall in Russian exports have caused the gross profitability on sales of the fuel production and distribution sector to go from 2% at the end of 2020 to close to 17% in the beginning of 2023.
In the case of electricity and gas supply, the margin is even higher, since it exceeded 25% in the first months of 2023. In this subsector, margins fell during the first half of 2021 and since then have maintained a growing trend . In any case, from the observatory they warn that in this area there is a lot of heterogeneity and that not all companies would have increased the margins in these volumes.
For its part, the food chain, although at the beginning of the energy crisis it was the least affected, saw its margins hit from 2021-2022 due to the increase in the cost of raw materials, so that it remains below its historical average. , although with a rebound in the first quarter of this year. Specifically, in these three months it has rebounded close to one percentage point.
For its part, a sector as affected by the pandemic as services had its most marked impact in the areas most closely linked to tourism, such as transport or the hospitality industry. In this case, they suffered a drop of about 75% between the end of 2019 and the first quarter of 2021, due to the collapse in demand. From that moment on, a recovery began that led to the return to the pre-covid level at the end of 2022.
These are data that the Government considers to support its taxes on energy companies. “In the fuel generation, production and distribution sectors, as well as electricity and gas generation and distribution, we have seen a very significant increase in business margins, which confirm that both the tax and previous measures to moderate extraordinary profits were justified. ”, says the Secretary of State for the Economy, Gonzalo García Andrés.
The observatory, which evaluates the margins according to the gross operating result on sales, starts with its own weaknesses and criticism from the employer. The weaknesses come because it does not include a sector as important as the financial sector or the self-employed. The financial sector is not analyzed because it is not taxed by VAT, which is one of the instruments used by the observatory. However, to justify the bank tax, from Economy they indicate that bank margins depend largely on interest rates, which have been rising. The self-employed do not appear either, also due to lack of information, since the data taken as reference does not appear in the information provided by self-employed workers.
The employers’ criticisms have come on the one hand for not taking the self-employed into account. “An observatory of business margins without the self-employed is like making bread with some cakes,” the president of ATA, Lorenzo Amor, wrote on Twitter, noting that the report loses representativeness by not including them. The complaint from the president of the CEOE, Antonio Garamendi, is deeper. “They should worry about the State accounts and less mess with what we do,” said Garamendi in line with his usual position on this observatory. He has always described it as an interventionist instrument, designed to target companies, and for this precise reason, last week the CEOE stood up to Economy, which had called a meeting with the social agents on the observatory.
