Only 16.6% of companies are interested in going to European funds

The great accelerator of economic growth in Spain, which is crucial in the light of the effects of the war in Ukraine, is of little interest to companies. A recent survey by the Bank of Spain shows that only 16.6% (specifically 5,798) of sampling companies are interested in “attending calls for projects funded by European funds”.

That proportion, according to data collected from February 23 to March 10 – Russia invaded Ukraine on February 24 – is 7 points less than the previous survey conducted in the last quarter of 2021, the institute said. Decreasing the desire of companies to take advantage ᲨThe next generation The EU (EU), which may reflect less attractiveness due to the more adjusted profitability of these projects due to rising costs, mainly due to rising energy prices and the existing uncertainty itself.

The limited interest of companies in European funds runs counter to the government’s intention to increase the pace of calls for economic activity in response to the blow of the war, along with a shock plan approved last week. Exactly, the executive is aiming to mobilize € 24,600 million in first-semester calls, as well as the last one announced by President Pedro Sanchez: to boost production of 11,000 million chips.

The absorption of European funds stood before the war as one of the main accelerators of economic growth, a positive impact of about 1.5 points, according to the Bank of Spain forecast by the end of 2021, and that the government had reached 2.5 points. Currently, all forecasts are in question and the fiscal margin remains to fight the very narrow inflation peak. One of the most recent estimates, Funcas, left growth of 4.2% this year.

The path of increased economic activity sustained by the strong recovery that came from 2021 after the pandemic shock and which will be reflected mainly in the first quarter, since the Center for Analysis forecasts that GDP will be just that. An advance of 1.1% in the remaining three quarters of 2022, “although the solution will be avoided.”

Price increase

The study also reflects “the intensification of intermediate consumption value growth that companies are exposed to in a context where their increasing percentage will be affected by supply difficulties throughout the year.”

“Nearly 82% of companies say they have seen an increase in intermediate prices, which is almost 7 percentage points higher than in the previous quarter,” said Mario Izquierdo, chief economist at the bank’s economics and statistics. The Spaniard, who signs the analysis of the study and notes that “in relation to the price of goods and services produced by the companies surveyed […]More than 40% of companies say they have raised prices, up 10 percentage points from the previous quarter. […]“.

In case of labor costs [salarios y cotizaciones]A year ago, forecasts increased slightly compared to the previous quarter. “Almost 70% of companies are currently expecting this variable to grow, about 5 points more than at the end of 2021,” he added.

Less ERTE and less ICO

The good news that research is gaining ground is generally losing relevance in applying measures that are most closely related to managing health crises, such as applying for ERTE or ICO loans.

“On the other hand, actions aimed at facilitating companies’ adaptation to the new economic environment after the pandemic maintain a high frequency in this publication. Thus, 36% of companies plan to make new investments in technology, 22% plan to expand their business to new markets or new products, and only 20% plan to launch new sales channels, a percentage that, in all cases, they are. “It has decreased somewhat in the last quarter,” said Mario Izquierdo.

“On the other hand, measures aimed at reducing the impact on the company’s liquidity or capital, such as reducing already planned investments, reducing labor costs (depending on the level of wages or the number of working hours) or increasing capital. “In line with the improvement of the economic situation, they have maintained a slight downward trend,” he concluded.