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COVID-19 : 66% of companies will not recover their pre-pandemic billing until 2022

The business tissue Spanish is going through a critical moment. The coronavirus crisis and the mismanagement of the Pedro Sánchez Government has led many companies to closure, and those that continue to operate assume that the coming months will be very hard. Specifically, 73% of Spanish businessmen see the economic situation in Spain as “bad or very bad” and 66% believe that it will not recover the turnover prior to the pandemic until -at least- 2022. This is clear from the latest report ‘Perspectivas España 2021’ prepared by KPMG in collaboration with CEOE in which 1,400 businessmen and managers from all over the country from more than 25 sectors have participated.

Specifically, 73% of those surveyed consider that the current economic situation is “bad or very bad”, while a minority of 39% is positive about the evolution of the economy and their businesses this year, which is five points more than in July of last year, and 29% believe that it will remain stable.

The survey also explains that 44% of employers rate the situation of their company as “sensitive”, although they believe that will be able to overcome the crisis by applying measures, and 5% of “worrying” when seeing their survival at risk, compared to 35% who see it as “comfortable” due to a “limited” impact of the pandemic and even 9% “solid”, as it was not affected. , and 6% “strong”, having been an opportunity to grow.

The president of CEOE, Antonio Garamendi, has said that after a 2020 that broke “all the schemes”, a business community worried about the situation and sees a need for a ‘ambitious’ strategy to complement the use of funds in investment projects “necessary and led by the private sector”, with structural reforms aimed at modernizing the economy.

Likewise, the president of KPMG in Spain, Hilario Albarracín, has said that the impact of the crisis persists, but 2021 will be “the year of transition to recovery», Although it has set the digital transformation, the improvement of processes and the development of new production and services as priorities.

Adjust templates

The study also shows that in 2020 50% of companies were forced to adjust their workforce, 47% their investments and 45% production costs, while the twelve-month outlook improves and 29% of employers anticipate that their number of employees will increase, compared to 32% who expect to reduce it and 38% who indicate that it will remain the same. In July of last year, the date of the previous survey, only 13% of companies expected an increase in hiring.

By sectors, technology is the one with the highest percentage of companies that will increase their workforce, 66%, while 59% of tourism companies will reduce their workforce, followed by banking, 57%, and restaurants, 53% .

Among the most demanded profiles for this year, the first three will have a lot to do with digitization: managers of digital transformation (62%); cybersecurity experts (46%), and specialists in emerging technologies such as artificial intelligence (42%).

Likewise, investment, in net terms, will remain stable, since 36% expect to increase investment, 33% maintain it and 32% reduce it. Technology, public sector and asset management are the sectors in which investment will increase most strongly in 2021, with 66%, 56% and 53%, respectively.In turn, 30% predict a greater internationalization of their company, 41% believe that it will remain the same and 7% that it will decrease.

In any case, 66% believe that they will not recover the turnover of pre-Covid-19 levels until at least 2022, compared to 18% of companies that hope to return to them this year and 15% that say they have not been affected.

The study indicates that organizations have had to start operations to guarantee the arrival of liquidity that would allow them to survive in the complex context of the Covid-19 crisis and lay the foundation for growth in the new reality.

Regarding financing, 52% of those surveyed indicate that they want to obtain it to cover their organic growth, 25% to refinance debt and 22% to deal with mergers and acquisitions (M&A). In 2020, 52% have carried out operational restructurings and 39% have financed or refinanced debt. In the next 12 months, 36% will address operational restructuring.

Regarding the European funds that Spain will receive until 2026, around 140,000 million euros between transfers and loans, 46% of those surveyed want to apply for these funds, 18% discard it and the remaining 36% still do not know if you will request them.

Meanwhile, 63% of those who do not know if they have eligible projects use as the main reason the lack of knowledge about the specific requirements of the plan.

Industrial modernization and digitization, the just and inclusive energy transition and, at some distance, the infrastructure and resilient ecosystems They are the ones that arouse the greatest interest among those surveyed who consider applying for these funds. Of course, for almost six out of 10 respondents, companies should manage them directly.

Weak domestic demand and more taxes

Other major concerns of businessmen is the state of demand and the rise in taxes. Specifically, almost half of the respondents (49%) consider that the weakness of domestic demand and the increase in taxes are the two main threats that the Spanish economy will have to face in the next 12 months. This is followed by political uncertainty (46%) and possible virus outbreaks (39%).

Asked about the risks that affect their business, 58% of those surveyed include demand risks, 47% mark the regulatory ones and 35% the operational ones. The risks associated with digitization, such as cyberattacks, with 28%, technological, with 20%, and talent, with 18%, are in a prominent position.

Finally, the report shows that digitization is the greatest challenge for 68% of the companies surveyed in the face of the new reality, with digital transformation being one of its three strategic priorities for 62%. In line with this, technological tools will be the main investment destination in 2021.