The bad economic start to the year has raised the pessimism of Spanish companies about the potential recovery of their billing levels prior to the outbreak of the pandemic. More and more companies do not foresee to recover their sales until next year or even from 2023, according to a survey carried out by KPMG more than 1,400 executives of companies that operate in 25 different sectors.
One of the main conclusions of this study on prospects in 2021 is that one two out of three companies (66%) will not achieve the turnover levels of 2019 this year. The figure is four points higher than the registered in the same survey carried out by the consultancy six months ago. The most striking thing is precisely that the group of companies that does not expect the recovery of their sales is growing strongly -from 20% to 31%. until at least the next 2023.
The recovery will be a long and costly road for these companies and will force many of them to dig deep into the cost cuts and restructuring of their businesses that they have already implemented in recent months. For now, the area that has focused most of the adjustments has been the workforce. 50% of the companies acknowledges that it has already reduced its staff volume during the crisis and one in three advises that it will have to continue to do so in the coming months.
However, the economic improvement and containment measures go by neighborhoods and there are sectors that are already billing the same or even more than a year ago. In businesses such as banking, automobiles, restaurants or tourism, more than half of the entrepreneurs surveyed already warn that they will have to undertake staff reductions in the next 12 months. On the other hand, in others such as the management of financial assets, technology or health, the responses in this regard are reduced below 10%.
“The sectors that most delay its recovery are Tourism and Transportation, two of the most affected by mobility restrictions, in addition to Automotive. Other consumer goods is the only sector in which the majority of companies respond that their sales will return to pre-pandemic figures this year, “the study responds.
The fear for the future of companies is not limited only to the evolution of the pandemic, according to the KPMG survey. For 72% of companies, the political situation in 2020 -a year marked by the formation of the Government of coalition between PSOE and Podemos- had a negative impact on their company, while only 4% believe that it had a positive impact and 24% indicate that it has been neutral.
This uncertainty is linked 49% of the time to the fear that the Executive will undertake regulatory changes that affect their businesses, which has led many companies to paralyze their investments while waiting for new regulatory frameworks to be clarified in sectors under review such as, for example, real estate.
“When asked about their current situation, 44% of Spanish companies affirm that it is sensitive, but they trust that they will be able to overcome the crisis by applying measures, while 35% rate it as comfortable, since the impact of the pandemic has been limited. 9% affirm that the pandemic has not affected them and 6% emphasize that it has even provided an opportunity to grow. On the opposite side, only 5% of the companies surveyed believe that their survival is at risk “, explains the consultant. However, the study includes senior executives from large and medium-sized companies, so the survival risk figure is much higher in other segments such as SMEs.
I am Derek Black, an author of World Stock Market. I have a degree in creative writing and journalism from the University of Central Florida. I have a passion for writing and informing the public. I strive to be accurate and fair in my reporting, and to provide a voice for those who may not otherwise be heard.