The uncertainties generated by the current economic scenario and the political anxiety and tension that illuminates the long year of hard electoral campaign that is coming do not sink the expectations of Spanish companies for this yearwho continue to predict, for the most part, a year of growth with more income, more investment and job stability.
Despite the impact of an energy crisis that persists, the escalation of inflation and the blow of interest rates to the rise and with forecasts that point to a progressive economic slowdown, Spanish businessmen still maintain their optimism for the coming twelve months, according to the report ‘Perspectivas España 2023‘, produced by the KPMG consultancy in collaboration with the patronal CEOE. 70% of Spanish businessmen predict that their companies will increase their sales during this year and 50% anticipate that the volume of investments of their groups will also grow in this 2023, according to the study, based on surveys of more than 1,100 executives of companies established in Spain and who carry out their activity in 24 different economic sectors.
The companies also maintain their commitment to job stability, although with greater prudence than last year, with 38% of companies confirming that their intention is to increase their workforce this year (eight points less than in 2022) and 50% who expect to keep the number of employees the same (seven points more than in last year’s report).
“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”, summarizes Juanjo Cano, president of KPMG Spain.
The economy, bad; my company, good
Businessmen do not hide their fears about the evolution of the Spanish economy. 57% of managers rate the situation of the country’s economy only as fair, and 28% consider it bad or very bad. However, all those cautions and fears that they show in relation to the economy as a whole, they do not express them about their own companies.
And it is that almost three quarters of entrepreneurs (73%) consider that their companies are in a good or excellent situation. And even 44% of the managers surveyed predict that the situation of their organization will improve this year, just the same percentage that expects that the Spanish economy will evolve worse this year.
In parallel, less than half of businessmen (46%) understand that political uncertainty is one of the main threats to the economy national this year and 36% place regulatory changes among the risks for the evolution of their businesses. The last few years have seen intense legislative activity to deal with the effects of the energy crisis, the inflationary spiral and also the economic impact of the war, and now the continuous pre-election environment is added due to the holding of regional and local elections. and the general elections at the end of the year.
“The conclusions of the report reaffirm the need to promote effective support measures for companies to keep the economy and employment going,” he points out. Antonio Garamendi, president of the CEOE employers’ association, which underlines the convenience of “having a framework of political stability and regulatory quality that generates a favorable investment climate.”
The blow of inflation
The report also reveals the effects of inflation not only on company results, but also in other areas of corporate management. 69% of managers say that inflation has had a high or very high impact on profit margins of your organization. And as a consequence of this, more than half of those surveyed (52%) say they have had to redefine their pricing policies to reflect the increase in costs and 31% plan to do so in the next twelve months. In addition, 45% have renegotiated their contracts with suppliers and 32% plan to do so throughout this year.
In fact, the majority of those surveyed (53%) place the development of measures to mitigate inflation among their strategic priorities for this year and 54% consider that rising prices are one of the main threats to the Spanish economy in the short term. . That is why three aspects closely related to inflation such as the cost of energy, price volatility or demand risk register the highest percentages of responses when managers are asked about the main risks for their business in this exercise (38%, 36% and 36%, respectively).