News

Inflation already limits the growth of 55% of Spanish companies

In a context in which a large number of companies have not yet recovered from the ravages of the health crisis, a new challenge has arrived that threatens their viability and cash flow: inflation. According to the new edition of the European Report on Intrum Payments 2022, presented this week at an international level, 55% of Spanish companies recognize that this problem is limiting its capacity to grow the business and take advantage of new opportunities.

As indicated by this study, which analyzes the financial health and economic forecasts of companies in 29 countries throughout Europe -including Spain-, the main reason for this statement is that 51% do not have the necessary experience and capacity to correctly manage the impact of inflation on your business.

However, this figure places Spain in a prominent position in Europe, since it is the second country with fewer organizations without experience and capacity to face the business consequences of price increases. Specifically, we would be only below Germany (49%) and seven points better than the European average (58%) and other markets such as Italy (60%), France (57%) and the United Kingdom (54%). The entities that claim to have less capacity to face inflation in their businesses are the Greek (68%), the Estonian (67%) and the Swiss (66%).

With inflation, many companies are seeing jeopardize your profit margin by the loss of customers due to the increase in the price of its own products, or by the increase in its business costs. A situation that, in turn, affects two of its main value assets: employees and suppliers.

Warning, scroll to continue reading

According to the Intrum report, 54% of Spanish organizations recognize that they do not have the capacity to meet the demand for wage increases from their workers in the face of the high inflation rate. In addition, 61% place this problem as the main reason for, on occasion, having had a difficult time to pay your suppliers on time. This percentage would explain why 76% of Spanish companies indicate having received the request to accept longer payment terms.

“Inflation will have a direct impact on the ability of companies to meet their payments on time, and therefore the increase in delinquencies, which represents a real risk for the growth of the business network. This represents an enormous challenge for companies that will have to establish, among other measures, mechanisms to reduce the payment periods of their clients.”, states José Luis Bellosta, Managing Director of Intrum in Spain.

The rise in interest rates, another major concern

Along with the rise in inflation, another major concern for Spanish companies is the rise in interest rates, which could make companies and individuals in a more vulnerable situation experience greater difficulties in paying their debts and, as a result, see their spending levels limited.

A situation that the companies consulted by Intrum are also aware of, since, according to this new edition of the European Payment Report 2022, almost 6 out of 10 companies (58%) are convinced that interest rates will increase, which is leading them to be more cautious with your investment and spending plans.

Spanish companies are situated in this aspect one point above the European average (59%), and in line with other economies such as Italy (58%). For their part, French and Austrian companies (65%) are the most cautious regarding their investment and spending plans in the face of rising interest rates, while German (55%) and Greek (52%) companies ) are more confident.

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *