Spanish SMEs show signs of having been left behind in the economic recovery, because they are more active but less profitable. These companies suffer a sharp reduction in margins, given that the increase in costs is greater than that of sales, which leads them to their most critical situation since 2014, according to the Indicator prepared by Cepyme. A situation that is aggravated by the inflationary crisis.
Businesses continue to function, but are less profitable. “Profitability has plummeted. It is at levels of six years ago, ”says the report. Specifically, the net return on assets, which had begun to recover in 2013, fell again with the pandemic to reach 3% in 2021, while in 2019 it was 3.7%.
There are three elements that hinder the operation of small and medium-sized companies: the reduction of margins, the increase in costs and the high levels of indebtedness. From the outset, costs rise more than sales. Total costs increased by 23% in the first quarter of 2022 while sales only increased by 19.8%, which reduces margins, worsens liquidity and undermines competitiveness.
In these cost increases, those of supplies and energy stand out, but also labor costs, which increased by 5.1% (eliminating the effect of ERTEs) in 2021, and 5.7% in the first quarter of 2022 In addition, small companies suffered a greater increase, of 6.3% compared to 4.1% for medium-sized companies.
At the same time, they face the next rise in interest rates and the consequent tightening of credit with high levels of debt, increased during the pandemic.
“Our productivity is falling and our margins are falling… wages have been highly conditioned by the increase in the minimum interprofessional wage,” says Francisco Vidal, director of Economy at Cepyme.
One of the elements that Cepyme highlights is the impact of the salary increase due to various factors. On the one hand, the increase in the minimum interprofessional salary (SMI), which has increased by 55% in a few years, from 655 euros in 2016 to 1,000 euros in 2022; To which are added the increases agreed in the agreements, with an average rise this year of 2.4%; and also the upward pressure on wages due to the lack of workers for certain positions.
In relation to salaries, the average gross ordinary salary of small companies in the first quarter of 2022 is 1,505 euros, which is 6% higher than a year earlier. For medium-sized companies, the increase is more moderate, 4.3%, which takes it to 1,875 euros.
By having lower productivity than large ones, “in many companies the salary increase is made at the cost of reducing margins,” says the Cepyme Indicator, and as an example it points out that in medium-sized companies sales per employee are in the first quarter of 2022 similar to those of 2015, when wages are almost 9% higher.
The observatory also includes data available for the first quarter of this year, among which an increase in nominal sales stands out, which have been recovering strongly since mid-2021; with which the trend prior to the pandemic has practically recovered. However, almost half of this year-on-year growth in turnover is explained by price increases, while the increase in physical volumes is more modest.
In addition, small and medium-sized companies have another weakness: their indebtedness. Although they had begun a deleveraging process from 2007 to 2020, throughout 2021 the ratio grew 10 points to almost 96% of net worth, due to the need to resort to credit due to the financial complications caused by the pandemic.
In the fourth quarter of last year, SMEs employed 8.6 million people, of which 6.1 million in small companies and the remaining 2.5 million in medium-sized ones. Some figures that mean having recovered all the jobs lost during the pandemic.
