Cepyme warns: Small and medium-sized companies are facing their worst financial crisis since 2014


The indicator on the condition of SMEs highlights the precarious current of small and medium-sized companies due to cost escalation and loss of profitability.

Gerardo Cuerva, Cepyme .  President of
Gerardo Cuerva, Cepyme . President ofJJ: GilnoEFE

The Confederation of Small and Medium Enterprises (Cepyme) has just launched Indicators on the status of SMEs, Which aims to “measure the strengths and weaknesses of the Spanish business fabric, which is mostly made up of SMEs”, they confirm in the organization. And the main conclusion of this indicator is that Spanish small and medium-sized companies “The business fabric is going through the toughest it has experienced since 2014.”“Despite the fact that the number of companies is recovering from pre-pandemic levels and a rebound in employment. The 2021 indicator is at 5.4 out of 10, the same level it was eight years ago.

According to the findings of the indicator, Although there is more activity, it is far less profitable. This situation is further exacerbated by the sharp rise in inflation in early 2022. Finally, SMEs are being dragged down by the high costs that employers have to bear, by a significant loss of productivity and, in general, by low profitability. According to Cepyme, the deteriorating condition of the companies has been particularly significant—and exacerbated in the first months of 2022—of factors such as:

, Decrease in trading margin. “The increase in total costs, especially supply and energy, is faster than sales,” he says at Sepaim. For SMEs as a whole, total costs increased by 23% in the first quarter of 2022, while sales grew by 19.8%. This reduces trading margins and consequently worsens the liquidity and competitiveness of the company.

, Biggest increase in labor cost in years. Labor cost in SMEs increased by 5.1% in 2021 (eliminating the impact of ERTE). This trend worsened, with labor costs increasing by an average of 5.7% during the first quarter of 2022. Also, small are the ones that faced higher growth with 6.3% growth as compared to medium’s 4.1%. It should be noted that Social Security contributions have also grown rapidly in recent years.

– high level of indebtedness, In 2021, SMEs’ liabilities on their net worth rose 10 percentage points to 96%, representing a clear weakness in the making due to a rise in rates and the tightening of credit that is already registered.

Profits of SMEs have come down. This is at the level six years ago. Notably, the net return on assets, which had begun to recover in 2013, fell again with the onset of the pandemic. The first quarter of 2022 saw an eighth year-on-year decline in net return on assets. In 2019 it was at 3.7% and has come down to 3%.

“This scenario drawn by the Sepim indicator reflects a negative trend that began between 2017 and 2018 and that the pandemic has worsened,” he says at the trade organization, so that Spain’s productive fabric is “under-capitalized and in a worse position than companies in other European countries to deal with the economic downturn.” The lack of effective direct aid, its low amount and bureaucracy are some of the reasons why Spanish SMEs have suffered worse health than the rest of the European Union.

Cepyme highlights that, according to the latest ECB surveys, Spanish companies are the most vulnerable of the large euro economies, These structural problems largely explain why the Spanish company is 30% smaller than the European one. Furthermore, in terms of size, the Spanish company is retreating more and more as the synthesis of its structural problems and the number of employees below its level in 2018 once again fell.

From Cepyme “It is urged Prompt action to facilitate adaptation of SMEs (tax, regulatory and credit), where approximately 9 million people work, in an economic environment that will be complicated by the evolution of the financial situation, the end of the bankruptcy moratorium or a chronology of inflation due to the effects of the second round generated by the transfer of the CPI to wages”.

Another problem faced by SMEs is the high wage cost. sepime explains The increase in the average salary of the little ones due to three factors: increase in the minimum wage, from 655.2 euros in 2016 to 1,000 euros in 2022 (+52.6%); Annual reassessment of wages agreed in the agreement, and upward pressure that workers lack wages to work in certain positions.

Small companies have a p . Islow average productivityThis is the reason why their salary is less as compared to big companies. “This lower productivity makes a general increase in wages that, as is happening now, more difficult for SMEs to bear,” he says. In fact, he points out, wage increases in many companies are done at the expense of reducing wages. Margin: lIn mid-sized companies, sales per employee, in the first quarter of 2022, is similar to 2015, when salaries are up about 9%.

Confederation urges government to take out policies that promote greater productivity and competitiveness in companies, Such as promoting a greater increase in the size of the business, for example, achieving an increase in wages, rather than opting for short-term measures that penalize business activity.

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