Covid, inflation, stagnation of consumption… These are just additional problems for a sector that is currently facing the rise in the minimum wage, the rise in Social Security contributions, the fall in consumption… “And a suffocating regulatory framework: A business opening its doors in 2021 would be affected by more than 3,000 regulations of all kinds, from European to municipal,” explains Francisco Vidal, director of economics at Cepyme, the employers’ association for small and medium-sized enterprises, which is facing a perfect storm for small Spanish businesses.
So Spanish businesses are facing an unprecedented wave of closures. If in 2022 19,000 closed, in January 2023 alone another 6,700 have gone out of business.
To understand the situation they face, it is enough to say that, according to Cepyme data, in the third quarter of 2022 the return on assets of small and medium-sized Spanish companies was 3%, with sales 2.9% lower than in the third quarter of 2019 (pre-covid) and costs that rose 23% year-on-year.
Added to that is the rise in financial costs: rates on new loans went from 1.92% (for small companies) and 1.36% (for medium-sized companies) in January 2022 to 3.53% and 3.36% respectively in December 2022, a month and a half ago.
And now, a new increase in the minimum wage – up to €1,080 – which is already equivalent to 70% of the average annual salary in companies with fewer than 50 workers, which is €1,535 according to the INE (€1,903 in medium-sized companies and €2,106 in large companies).
This, together with a fall in productivity – in Spain it has fallen by almost 2% from 2015 to 2022, while in the EU as a whole it increased by 2.5%, according to data from the European Commission – make for a bleak outlook.
