Espanola Medium-Sized Company Regains Its Pulse

The health of Spanish medium-sized companies, a complex indicator in which multiple factors intervene, is clearly going through a period of transition towards a promising scenario.

After dark months caused by the coronavirus crisis, in which the expectations of the managers were predominantly pessimistic, the Spanish business fabric today recognizes that it is glimpsing a hopeful economic horizon, with more opportunities than obstacles and greater enthusiasm than what they show in their together the rest of the businessmen of Europe and globally.

This is proven by the latest wave of our Pulse of the Medium-sized Spanish company in its data for the first semester. Since December 2020, the percentage of optimistic Spanish executives about the evolution of their businesses has tripled and has starred in the biggest rebound in our historical series, going from 24 to 60%, which places us at levels not already pre-COVID, but rather in line with those of the first half of 2018, when we were in a moment of sustained growth.

It can be assumed that this recovered optimism is due in part to the health situation, with Spain among the twenty countries in the world with the highest vaccination rate and almost three out of four immunized inhabitants, but also to the steps taken in the processing and distribution of the 140,000 million euros of Next Generation funds , of which Spain has already received the first check of 9,000 million.

The injection of vaccines and economic funds are revitalizing the confidence of entrepreneurs of mid-market companies and are decisive in an unusual business photograph that illuminates new effects and trends. Some incentives that explain, for example, that the percentages of entrepreneurs who plan to improve their income and profits in the next year have doubled since December, standing respectively at 55 and 46%.

These two factors are stimulating the export appetite , which goes from 32% to 45%; the best data in our entire historical series, which dates back to 2011. A result that outlines a vibrant phase of internationalization in Spain.

Despite the significant difficulties that businessmen continue to identify in their plans to enter new markets, they have internalized, with good judgment, that this dimension is one of the most important levers of recovery. This was verified in Spain in the 70s, during the end of the oil crisis, in 2008, and everything points, according to the extraordinary export data that the ICEX throws in the first half of the year, which will also be so in this juncture.

Brussels’ commitment to digital transformation through its historic aid package has also catapulted the investment expectations of entrepreneurs in this line, which goes from 34%, during the negotiations of the European Funds, to 53%, when they are they began to clarify details of the allocation of aid for Spain. Likewise, today, after a year of stagnation, 4 out of 10 entrepreneurs are already betting on R&D.

The employment expectations collected by our Pulse and the unemployment figures published by the Ministry of Labor present a logical correlation: employers are becoming more optimistic as unemployment falls. The same phenomenon occurs between expectations of salary evolution and the government’s announcements to raise the minimum wage. However, these encouraging forecasts are in paradoxical contrast to the growing concern of managers about the lack of qualified personnel.

Business organizations in tourism, hospitality or commerce, for example, recognize that this summer they have had enormous difficulties to fill vacancies. Something that the unions point to the improvable conditions and the experts to the uncertainty that these positions generate today; which has caused job seekers to bet on other sectors that are now more solvent, such as construction.

Although the diagnosis of the Spanish medium-sized company is once again favorable, it is advisable to pay special attention to these sources of risk that worry managers. Business obstacles, such as energy costs, which have increased 11 points, at a time when the price of energy has skyrocketed, or bureaucracy and regulation, the biggest business headache, in a context in which Multiple Administrations have deployed hundreds of regulations and legislation in a short period of time.

In short, even at times like the current one, in which the health of our medium-sized companies is clearly positive, we must thoroughly analyze the available data to be able to detect what continues to concern the native middle-market. It is clear that this segment has regained its lost pulse during the worst months of the pandemic, but this is not enough.

It is time to enlarge our medium-sized companies and provide them with greater financial muscle and international competitiveness, so that they play a decisive role in the macro structure of our country. We must be attentive to their evolution, because the barriers that they now perceive give us clues as to what, in the coming months, could slow down our recovery.

Leave a Reply

Your email address will not be published. Required fields are marked *