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Spanish SMEs deteriorate to 2014 levels

The status of small and medium-sized enterprises (SMEs) has gone back to 2014 levels due to reduction in business margins,…

By admin , in news , at June 6, 2022

The status of small and medium-sized enterprises (SMEs) has gone back to 2014 levels due to reduction in business margins, increase in labor cost, high level of debt and decline in profitability. Indicators on the Status of SMEsPublished this Monday by the Spanish Confederation of Small and Medium Enterprises (Cepime).

The 2021 indicator stood at 5.4 points out of 10, the same level that was the fabric of the Spanish business eight years ago. With these data, Cepyme concluded that the Spanish SME remains «cold» After the pandemic, since their activity is less profitable.

supply cost

One of the reasons for this loss of profitability is due to increased supply and energy costs, which exceed and reduce sales revenue. margin Business. With figures for the first quarter of 2022, total costs increased by 23%, while sales increased by 19.8%.

The indicator also shows that labor costs for SMEs increased by 5.1% in 2021, without calculating its impact. Temporary Employment Regulation Files (ERTE), and increased to 5.7 percent in the first quarter of this year. Within SMEs, small companies have been hit hardest by this increase in labor costs, which is 6.3% compared to 4.1% registered in medium-sized companies.

SMEs participating in the expansion of this indicator also show difficulties in handling their businesses due to increased wages, which Interprofessional Minimum Wage (SMI) has increased from EUR 655.2 in 2016 to EUR 1,000 in 2022. Many SMEs say that this increase in wages is being done at the cost of reducing margins.

In terms of profitability, SMEs started recovering in 2013, but Epidemic stopped that trend. Thus, it fell to 3% in the first quarter of 2022, marking the eighth year-on-year decline in net return on assets. The indicator shows that profitability has returned to 2016 levels.

less competitive

Spanish SMEs thus find themselves with a worsening of liquidity and a reduction in the competitiveness of the company, as reported by Sepaim. Small and medium-sized companies are also facing more difficulties in accessing credit and B by B is predicting weakness in their businesses due to future rate hikes.also central european (ECB). Added to this, according to the indicator’s data, is that SMEs’ liabilities on their net worth rose 10 percentage points to 96% in 2021.

Cepyme has denounced that the Spanish business fabric is “under-capitalized and in worse conditions” than European SMEs to face the economic downturn. The confederation states that national SMEs have less support, less volume and more bureaucracy than small and medium-sized companies in other EU countries.

Cepyme denounces that the Spanish business fabric is under-capitalized and in worse shape than Europe

This places them as “the weakest of the large euro economies”, according to Sepim, citing surveys of European Central Bank (B.C).

To address this situation, Cepyme calls for immediate action in tax, regulatory and credit matters, especially in an economic context such as the current one, with rising inflation. Furthermore, they ask the government for policies that promote productivity and competition among companies.

Spanish SMEs deteriorate to 2014 levels

2022-06-06 08:18:45