Total sales decreased by 2.2% in June compared to May, with a particular impact on foreign companies. Wages rose just 2.9%, compared to inflation of 10.2% over the period
The inflationary gap between Spain and the rest of the European Union (EU) is putting another dent in the price competitiveness of Spanish companies. According to data from the tax authorities released this Wednesday, the revenue of the country’s major companies fell 2.2% in June from May, the month in which the data already saw a month-on-month decline of 0.2%. 6% reflected.
Compared to the moderate 0.2% decline in domestic sales, June exports fell by 7.1% per month, after growing 3.5% in May and 5.7% in April. The slowdown was particularly evident in sales to the EU, where the decline was 9.4% compared to May.
On an annual basis, turnover in the sector increased by 7.6%. But the growth rate is below 9.6% in May and 10.5% in April, also due to the moderation in exports, which, despite growing 10%, were well below the percentage in May (19.7%).
It is true that despite the slowdown in recent years, Spain has managed to maintain its profile as a global exporting power despite the impact of the pandemic. But the growing price differential with other neighboring countries has made our goods and services more expensive compared to other partners in the common currency. It should be remembered that Spain said goodbye to June with an inflation rate of 10.2%, compared to 9.6% on average in Europe.
And this is also noticeable in other indicators such as the evolution of the order books for the national industry. According to the latest reference, the manufacturing PMI – which measures factory activity – fell to 48.7 points in July, below the 50 threshold separating growth and contraction. And the order book recorded the largest decline in the past two years.
The problem is that the rise in energy prices has led to higher costs for companies, forcing them to increase selling prices relative to their European competitors, or reduce margins to maintain their exports.
At the moment, this possible price increase is not passed on in wage costs, which, despite sky-high inflation, continue to evolve very moderately and thereby damage the purchasing power of the workers. Data from the tax authorities show that average wages in large Spanish companies fell by 0.6% in monthly figures in June (in monthly figures). And the increase was only 2.9% year-on-year (compared to June 2021). A much more moderate recovery than in May (3.4%), April (5.5%) or March (4.1%).
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.
