Cepyme warns that the profitability of SMEs has fallen by a quarter since 2019 and that their margins are falling due to the sharp increase in their spending
The escalation in prices is driving costs facing small and medium-sized businesses, to the point that they are up 24.4% in the second quarter of 2022, Cepyme said in a report.
SME employers are expressing concern because costs are growing faster than revenues; In addition, the turnover of these companies has slowed down and, as a result of this gap, the operating margins continue to decline. Notably, the cost of inputs (price of goods purchased to produce other goods and services) increased by 51.7% in the second quarter compared to the same period of the previous year, the highest increase in more than 20 years . For its part, energy costs (including electricity, gas, oil derivatives and water supply) have doubled (+113.7%), while the cost of semi-finished products has also increased by 21.5%, a rate never seen in more than two decades and capital goods 5.7%.
Similarly, labor costs increased 6.2% year-on-year in the second quarter of 2022, impacted by the 6.6% increase in the average ordinary salary of SMEs, and the cost of the services they use is at its highest level since 2007.
This has contributed to SMEs’ profitability falling by a quarter since 2019, coupled with a significant loss of productivity, the report said.
Despite all this, Cepyme warns that this situation points to a worsening situation for SMEs in the autumn, when activity slows and companies are forced to borrow more to cover costs, despite the debt ratio already exceeding 100 percent. % of its assets and chains four consecutive quarters of increases. This is the highest level since 2018 and 12.7 percentage points higher than a year earlier.
Employers say it is “worrying” that the rise in debt in recent quarters is happening before the deleveraging process that began in 2008 has been completed. because of the increase in interest, an extra invoice will have to be added to the business accounts.
Faced with this situation of “clear fragility” of the Spanish corporate fabric, Cepyme calls for the implementation of a comprehensive business support plan that will help alleviate the high costs faced by SMEs this autumn, support companies in their deleveraging process and make a firm commitment to business growth.
In addition, the employer believes that the fiscal measures announced by the government, although they are a response to low-income citizens affected by inflation, do not take into account the difficult situation of Spanish SMEs. Rather, “they generally undermine our perception of a stable country for investment and business,” they denounce. In this sense, they point out that the two-point drop in companies targeting only part of SMEs is not in line with the reality many companies are experiencing, whose cost increase is stifling their liquidity and in many cases is the cause of solvency problems.
Source: La Verdad
I’m Wayne Wickman, a professional journalist and author for Today Times Live. My specialty is covering global news and current events, offering readers a unique perspective on the world’s most pressing issues. I’m passionate about storytelling and helping people stay informed on the goings-on of our planet.
