Uncertainties created by the current economic scenario and political anxiety and tension illuminating the long year of the upcoming difficult election campaign Don’t screw up the expectations of Spanish companies this yearmostly keep guessing a year of growth with more income, more investment and job stability.
Despite the impact of the ongoing energy crisis, rising inflation and rising interest rates, and forecasts pointing to a gradual economic slowdown, Spanish businessmen remain optimistic for the next twelve months. ‘Perspectivas España 2023’ report‘ produced by KPMG consulting in collaboration with CEOE. 70% of Spanish businessmen predict their company will increase sales throughout this year and 50% predict their group’s investment volume will also grow This is in 2023, according to research based on surveys of more than 1,100 company executives founded in Spain and operating in 24 different economic sectors.
Companies also remain committed to business stability, albeit more cautiously than last year. 38% of companies confirm their intention is to increase workforce this year (eight points less than 2022) and 50% of those expecting to keep headcount the same (seven points more than last year’s report).
“Within the common sense required by the current context, Spanish businessmen’s prospects for the development of their organization are optimistic and show their confidence in the increase in sales, the promotion of investment and the maintenance of employment”, sums up its President, Juanjo Cano. KPMG Spain.
The economy is bad; my company, good
Businessmen do not hide their fears about the development of the Spanish economy. While 57% of the executives evaluate the state of the country’s economy as just fair, 28% evaluate it as bad or very bad. However, they do not express all these precautions and fears about the economy as a whole about their own companies.
And this Almost three-quarters (73%) of entrepreneurs consider their company to be in good or excellent condition. In fact, 44% of executives surveyed predict that their organization will improve this year, the same percentage who expect the Spanish economy to worsen this year.
Parallel, Less than half (46%) of businessmen understand that political uncertainty is one of the main threats to the economy This year, national and 36% see legislative changes as risks to the development of their businesses. The last few years have seen intense legislative activity to tackle the economic effects of the energy crisis, the inflationary spiral, as well as the war, and now the constant pre-election environment has been added as regional and local elections are held. .and general elections at the end of the year.
“The report’s results reaffirm the need for companies to promote effective support measures to keep the economy and jobs going,” he states. Antonio Garamendi, president of the CEOE employers association, It highlights the convenience of “having a framework of political stability and regulatory quality that creates a favorable investment climate”.
Inflation blow
The report also reveals the effects of inflation not only on company results but also in other areas of corporate governance. 69% of executives say inflation has a high or very high impact on profit margins from your organization. As a result, more than half (52%) of respondents say they have had to redefine their pricing policies to reflect the increase in costs, and 31% expect to do so in the next twelve months. In addition, 45% have renegotiated their contracts with suppliers, and 32% plan to do so during this year.
As a matter of fact, the majority of respondents (53%) cite the development of measures to reduce inflation among their strategic priorities this year, and 54% think that rising prices are one of the main threats to the Spanish economy in the short term. Therefore, three aspects closely related to inflation, such as energy cost, price volatility, or demand risk, record the highest percentages of responses (38%, 36%, and 36%) in this exercise when managers are asked about the main risks to their business. , respectively).