The uncertainty stemming from today’s economic volatility and the visible political tension set the stage for a prolonged, challenging election cycle. Spanish business leaders face a year of decision and recalibration, aiming for growth, higher revenue, increased investment, and steadier employment despite the pressure points ahead.
Even with the energy squeeze, rising inflation, and higher borrowing costs, forecasts hint at a slower economy. Yet the leadership circle in Spain remains hopeful about the next twelve months. The Perspectives España report, produced by KPMG Spain in collaboration with CEOE, shows that 70% of surveyed executives expect higher sales, and half anticipate greater investment within the year. The study draws on responses from more than 1,100 senior leaders across 24 sectors, all based in Spain.
Companies are pursuing stability, though with more caution than in the prior year. About 38% plan to increase their workforce, a reduction of eight percentage points from the previous year, while 50% intend to keep headcount unchanged, up seven points from last year’s outlook.
The report quotes Juanjo Cano, president of KPMG Spain, who notes that in the current climate Spanish business leaders remain practical yet optimistic about growth in sales, increased investment, and sustained employment. This sentiment reflects a belief that prudent action today can support stronger performance tomorrow.
The economy looks tough, but some firms stay resilient
A cautious mood persists as executives assess the national economy. While 57% rate the overall state as fair, 28% view it as poor or very poor. Despite these concerns about the broader economy, many firms feel differently about their own prospects.
Nearly three-quarters of entrepreneurs consider their company to be in good or excellent condition. In fact, 44% predict their organization will improve this year, a figure matching the portion who expect a worsening national economy.
At the same time, fewer business leaders see political uncertainty as a minor risk. About 46% identify political risk as a major concern, and 36% flag potential legislative changes as a threat to growth. The recent years have brought intense policy activity to address the energy crisis, inflation, and global conflict; now, the near-term political cycle adds another layer of risk as regional and national elections unfold.
Antonio Garamendi, president of the CEOE employers association, stresses the value of maintaining a stable political framework and strong regulatory quality to foster a favorable investment climate. He is quoted as underscoring the importance of measures that support a healthy economy and job retention even in uncertain times.
Inflation pressure and its consequences
The report highlights how inflation is reshaping corporate governance and performance. Under 69% of executives report a high or very high impact on profit margins, while more than half say they have had to adjust pricing to cover rising costs. About 31% expect further pricing changes in the coming year. Additionally, 45% have renegotiated supplier contracts, with 32% planning more renegotiations during the year.
Inflation relief strategies occupy a central place in strategic planning. A majority, 53%, identify inflation containment as a priority this year, and 54% see rising prices as a key near-term threat to the Spanish economy. When managers name the main risks to their businesses, energy costs, price volatility, and demand fluctuations rank at the top, underscoring the link between macro pressures and operational risk.