Inflation caps growth of 55% of Spanish companies

In a context where a large number of companies have not yet recovered from the ravages of the health crisis, a new challenge has arrived that threatens their survival and cash flow: inflation. According to the new edition of the Intrum European Payments Report 2022, presented this week at the international level, 55% of Spanish companies are aware that these problems are limiting their ability to grow their business and take advantage of new opportunities.

As this study, which analyzed the estimated financial and economic health of companies in 29 countries across Europe –including Spain-, shows, the main reason for this statement is that 51% lack the necessary experience and capacity to properly manage impacts. inflation in your company.

However, this figure puts Spain in a prominent position in Europe, as it is the second country with the fewest organizations without the experience and capacity to deal with the business consequences of rising prices. In particular, we will be only behind Germany (49%) and seven points better than the European average (58%) and other markets such as Italy (60%), France (57%) and the UK (54%). Entities claiming to be less able to deal with inflation in their business are Greece (68%), Estonia (67%) and Switzerland (66%).

With inflation, many companies see their profit margins threatened by losing customers due to rising prices for their own products, or rising costs of business. A situation that, in turn, affects its two main value assets: employees and suppliers.

According to an Intrum report, 54% of Spanish organizations admit that they do not have the capacity to meet their workers’ demands for higher wages in the face of high inflation. In addition, 61% cite this problem as the main reason, at times, having difficulty paying their suppliers on time. This percentage would explain why 76% of Spanish companies indicated that they had accepted a request to accept the longer payment terms.

“Inflation will have a direct impact on companies’ ability to meet their payments on time, and therefore an increase in arrears, which is a real risk to the growth of the business network. This is a huge challenge for companies that have to establish, among other things, mechanisms to reduce their client’s payment periods” stated José Luis Bellosta, Managing Director of Intrum in Spain.

Rising interest rates, other key concerns

As inflation picks up, another major concern for Spanish companies is rising interest rates, which could leave companies and individuals in more vulnerable situations with greater difficulty paying their debts and, as a result, see their spending levels limited.

A situation that companies consulted by Intrum are also aware of, because, according to this new edition of the 2022 European Payments Report, almost 6 in 10 companies (58%) believe that interest rates will increase, which leads them to be more careful with their investment plans and their expenses.

Spanish companies are 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 firms (65%) are the most cautious about their investment and spending plans in the face of rising interest rates, while German (55%) and Greek (52%) firms are more confident.

Roderick Gilbert

"Entrepreneur. Internet fanatic. Certified zombie scholar. Friendly troublemaker. Bacon expert."

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