Only 47% of medium-sized companies expect to improve their benefits for the rest of the year

Companies are looking cautiously at the second part of 2023, since although inflation has moderated to around 2% and employment is at record figures, price rises are expected to accelerate again and economic activity to start to show symptoms of exhaustion -especially consumption, due to the impact of interest rate rises on the family pocket-, hence only 47% of medium-sized companies trust that their profits will increase from here to end of the year.

They are somewhat more optimistic with respect to their income, since 55% believe that they will increase, but this increase in turnover will not always translate into an increase in profits due to what the costs entail, according to the report 'Pulse of the median Spanish company' relating to the first half of 2023, prepared by the consultant Grant Thornton and to which EL MUNDO has had access.

The expectations are prudent, although they do reflect more optimism than companies had in the second half of 2022, when inflation was four times the current rate and the shadow of recession was hovering over the economy. At that time, only 37% of companies believed that their profits would improve this year, 10 points less than now. These fears, however, have not materialized and the Gross Domestic Product (GDP) has continued to grow this year despite the uncertainties: 0.5% from January to March and 0.4% from April to June.

“The improvement in the economic situation driven by the decline in inflation and energy costs has allowed almost all the indicators related to the forecast of income, optimism, profits, investments or employment to present better results in this wave,” they explain. the authors of the study.

Even so, the improvement does not imply that there is general optimism throughout the business fabric. Only 42% of the 400 medium-sized companies (between 50 and 500 employees) surveyed in Spain to carry out the study plan to increase their investments in the remainder of the year and, of these, the majority will do so through the purchase of premises or new construction properties, although the willingness to invest in R&D is also growing.

As in the rest of the variables, only four out of ten companies surveyed (42%) intend to continue increasing the workforce, while only 24% plan to raise their employees' salaries between now and the end of the year.

Risks for exporters

The only aspect in which the country's medium-sized companies are more pessimistic than in 2022 is in foreign trade. The weakness of the European economy and of our main trading partners, such as Germany, which has managed to emerge from the technical recession in this quarter but with growth of 0%, has caused foreign trade to slow down GDP already in the period from April to June.

The manufacturing industry is one of the sectors that has noticed this slowdown the most, with a collapse in its orders this month and a destruction of jobs, and all the companies that sell abroad are beginning to fear that there will be a slowdown in sales.. According to this study, only 38% of the companies that export goods abroad believe that their sales will increase in the coming months, while the remaining 62% expect them to remain unchanged or, more likely, to decrease.

“Although at a European level this expectation does not increase by staying flat, the three-point drop in our country is a discordant note in a Pulse of the Medium-sized Company optimistic with respect to the Spanish situation”, the authors of the report point out, since the other European companies have not increased their pessimism regarding their exports.