Four in ten companies report labor availability challenges, and this share climbs to more than half in sectors with high activity, such as hospitality and construction, according to data from the Bank of Spain.
The Bank of Spain’s third-quarter update on the evolution of Spanish firms shows a growing concern about hiring constraints. The Ebae survey reveals that 39 percent of firms perceive difficulties in finding workers, up five points from the second-quarter figure of 34 percent. When broken down by sector, reporting of labor shortages is especially prevalent in hospitality and construction, with more than half of companies in those areas noting adverse effects on their operations (Bank of Spain).
A growing number of businesses expect higher costs for energy and wages within a year
The online survey, conducted between August 28 and September 11, covers around 15,000 firms, with about 25 percent in regular collaboration with the Balance Sheet Center of the institution. Of the total, 6,086 valid responses underpin the results, which point to rising tensions in the labor market (Bank of Spain).
Less hiring, higher salary costs
Results indicate that 40 percent of firms facing recruitment problems are scaling back planned hiring, a tendency slightly more pronounced among larger companies. At the same time, about 38 percent report an uptick in wage costs as a consequence of the labor market pressures (Bank of Spain).
Conversely, around one-third of affected businesses say that labor shortages have negatively impacted production or sales. Investment decisions are especially affected among smaller enterprises and those with lower workforce density. Importantly, 16.1 percent report that they are reducing lay-offs in response to hiring frictions (Bank of Spain).
More than half of firms experiencing labor shortages say the problem is the lack of employees with the right qualifications for vacant positions. The gap is strongest in roles requiring vocational training at middle or higher levels and varies by sector, notably industry, construction, and transportation. A secondary reason cited is difficulty retaining workers, particularly those with lower qualifications, along with challenges in filling positions requiring university degrees and satisfying working and wage conditions (Bank of Spain).
Sales, pricing, and margins
The latest Ebae wave also shows a deterioration in turnover across most sectors during the third quarter, following a small improvement in the preceding period. Turnover declined in most sectors, with tourism and information and communications services being exceptions where the trend did not match the broader pattern (Bank of Spain).
Additionally, there are signs of inflation stabilization taking a pause. About 58.4 percent of firms reported a further rise in intermediate costs, a jump of about 10 percentage points from the second quarter, and more expect this rise to continue into the fourth quarter (Bank of Spain).
While the share of firms increasing prices in the third quarter rose to 26.4 percent, expectations point to continued price increases in the coming months. The combined effect of higher energy costs and labor market tensions is evident, with around two-thirds of companies anticipating higher costs within the next year (Bank of Spain).
Economic policy uncertainty remains a concern, with a modest improvement in business activity but levels still near multiyear lows as firms weigh the implications for investment and growth (Bank of Spain).