Spanish companies expect strong sales growth in the second quarter after stagnating between January and March, according to the Bank of Spain’s latest survey of business activity. Known as EBAE.
This survey reveals expectations for the largest growth in billings in the next quarter since the first quarter of 2022. Strong growth that coincides with the lowest growth forecast for costs (energy, raw materials, wages…). Inflation crisis.
The survey includes a sample of 5,707 companies and was conducted from February 13 to 27. Therefore, it does not include the financial turmoil in the United States after the collapse of Silico Valley Bank and the bailout of the Swiss bank Credit Suisse.
In addition, the Bank of Spain explains that “after last year’s strong increase in inflation, companies’ responses to billing fluctuations will be more driven by price volatility, which makes it difficult to really assess the evolution of business activity.” deadlines.
Given these definitions, the moderation of the company’s cost growth is relevant, while the growth rate of sales prices is maintained, as can be seen from the graph.
“Regarding the evolution of intermediate consumption costs, the survey results indicate some additional moderation of inflationary pressures in this quarter, which, however, will remain high,” summarize Alejandro Fernandez and Mario Izquierdo, economists. Bank of Spain.
“When companies are asked about their outlook a year ahead, the results point in the same direction: respondents expect spending pressures to remain high, but somewhat lower than expected over the same time horizon three months ago,” they continue.
The answers of the companies are summarized in an index that weighs their qualitative assessments, which are formed on five levels, included between “significant decrease” and “significant increase”, so in the two extreme cases, when all respondents applied to the first or second of these two answers, the index will receive -2 and 2 values, respectively.
There is no information about the profit margin
“Qualitative information available in EBAE on quarterly changes in sales prices and company costs does not allow a quantitative assessment of the evolution of business margins. [la capacidad de las empresas de convertir en beneficios las ingresos, tras hacer frente a los costes]”, they influence from the Bank of Spain. “To analyze the evolution of the margins with greater precision, it is necessary to turn to other sources of information,” they comment.
As for job growth, Spanish companies are reporting the biggest job growth since the spring of the entire price hike crisis, after a first quarter of “stability.”
Regarding the evolution of the various factors that are decisive, the increase in energy costs continues to have a negative impact on a very high percentage of the surveyed companies (77%). “Despite the fact that this figure is slightly lower than in previous quarters,” the institute emphasizes.
“On the other hand, in the first quarter, negative factors on the activity of companies, which have difficulty in receiving supplies from conventional suppliers, are still decreasing. Specifically, it is cited as an undesirable factor by 24% of surveyed companies, which is seven percentage points less than the previous quarter, which is also the lowest since the end of 2021,” he continues. As for the prospect of salary increases, there are almost no changes.
European funds
The Bank of Spain survey includes asking companies about European funds for the recovery plan. “16.5% of companies have made some request to these European funds, this percentage is somewhat lower in small companies than in large companies”, Alejandro Fernandez and Mario Izquierdo.
“Among the applicant companies, 44% (equivalent to 7.3% of the total sample) have already received a favorable resolution, while an additional 35% (6% of the total) are awaiting a decision. By branches, companies in the transport sector are particularly active in this area, as 28.6% have a demand, compared to lower percentages recorded in branches such as professional, scientific and technical activities (8%) or construction (9.6%). Add these experts.
Source: El Diario
