Entrepreneurs and senior managers of Spanish companies are generally optimistic about the progress of their businesses, despite economic uncertainty, persistent inflation and tightening credit conditions. According to the report ‘Perspectivas España 2023’, prepared by KPMG and Ceoe, 70% expect to increase revenue this year and the vast majority, 88%, will maintain or expand the workforce.
The report is drawn up from a survey in which, on this occasion, 1,116 companies from 24 sectors have participated. The survey was carried out between December last year and February this year, so it includes both the economic slowdown at the end of last year and what happened at the start of the year. 51% of those surveyed are presidents, general directors, owners or directors of companies.
The billing increase forecasts in 70% of the companies are the highest in the last five years if 2022 is excluded, the year in which inflation and recovery prospects placed this variable at 77%. 17% expect their income to stagnate this year and 12% predict that they will go down.
One thing is revenue and another is profit margins, which are under pressure from rising costs. 69% of those surveyed say that inflation has already had a high or very high impact on their margins and for more than half the measures to contain the rise in costs are already part of the strategic priorities.
Interest rate rises are having a direct effect on investments. 50% of businessmen and managers expect to raise them this year, ten points less than in the previous year’s edition, compared to 36% who will maintain them at current levels.
The caution in the investment effort is an indication of the high level of uncertainty, which can also be seen in other chapters of the report. When businessmen and managers are asked about the economic situation, they are more pessimistic than when talking about their own business.
28% of those surveyed consider that the current situation of the economy is bad or very bad, but 44% think that the environment will deteriorate in the coming months. They start from this perception despite considering that 73% of the cases that their company is doing well or very well.
One way to measure the optimism of companies has to do with the hiring of workers. The percentage of those who will maintain or increase the workforce, 88%, is one point less than in the forecasts offered for 2022, but it is a good result when compared to previous years. It exceeds the forecasts of 2019 and, of course, 2020 and 2021, the years of the pandemic, in which many companies put their business into hibernation.
“Within the prudence required by the current context, the expectations of Spanish businessmen about the evolution of their organizations are optimistic and show their confidence in the increase in sales, the promotion of investment and the maintenance of employment,” he says. the president of KPMG, Juanjo Cano.
When businessmen are asked about the risks for their business, the cost of energy, the volatility of prices or the possible drop in demand are the most cited concerns.
They also criticize the political uncertainty. The “intense legislative activity” and the holding of regional, municipal and general elections also affects the perception of business by companies. 46% of those surveyed include political uncertainty among the main threats to the Spanish economy in 2023.
“The conclusions of the report reaffirm the need to promote effective support measures for companies to keep the economy and employment going, as well as to have a framework of political stability and regulatory quality that generates a favorable investment climate.” says the president of the CEOE, Antonio Garamendi.
