Inflation means 60% of SMEs unable to increase sales in 2023 says CEPYME

Europe SMEs

According to the CEPYME Barometer #LaPymeHabla of July, corresponding to the first half of 2023, 59.12% of SMEs are unable to recover their sales. Cepyme describes a scenario of economic recovery with an uneven impact on companies, which responds both to accumulated inflation and rising labour and tax costs and to the weakening of consumption in the final stretch of 2022 and early 2023, on the basis of an incomplete recovery.

Despite this effort by SMEs, sales have fallen in 27% of cases, while they remain frozen in 32.08% of companies. Moreover, the increase in costs and the failure of sales to pick up have an impact on business margins. Three out of four small and medium-sized enterprises have avoided fully passing on the increase in their costs to final prices.

In fact, at the same time that the Ministry of Economic Affairs and Digital Transformation is promoting a Business Margins Observatory, CEPYME highlights that 60% of SMEs surveyed say that their business margins have been squeezed, compromising the viability of 13.1% of companies.

Nevertheless, SMEs have contributed to the containment of inflation in order not to lose more sales: 36% have maintained their prices despite cost increases and 41% have increased them by less than inflation. In 2% of cases, prices have even been lowered.

The Barometer shows that the main concerns of companies have to do with costs of all kinds: energy, labour, financial, tax and bureaucratic. Likewise, 80% of the companies surveyed fail the current government’s economic policy because they do not consider it to be adequate for the current situation and 93% have little or no confidence that European funds – perceived by SMEs as practically inaccessible – can strengthen economic recovery.

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The Corner
The Corner has a team of on-the-ground reporters in capital cities ranging from New York to Beijing. Their stories are edited by the teams at the Spanish magazine Consejeros (for members of companies’ boards of directors) and at the stock market news site Consenso Del Mercado (market consensus). They have worked in economics and communication for over 25 years.