Almost half of businessmen expect the Spanish economy to worsen in the next 12 months Companies

The ECB's decision to maintain interest rates at 4.5%, added to weak growth in the euro zone – below 1% – expected this year, dampened traders' enthusiasm about the state of the economy. Specifically, 54% of managers rate the situation in Spain as average and 45% expect it to worsen over the next 12 months. The twentieth edition of the survey reflects this…

The ECB's decision to maintain interest rates at 4.5%, added to weak growth in the euro zone – below 1% – expected this year, dampened traders' enthusiasm about the state of the economy. Specifically, 54% of managers rate the situation in Spain as average and 45% expect it to worsen over the next 12 months. This is reflected in the twentieth edition of the survey Spain 2024 OutlookCarried out by KPMG in association with CEOE, more than 1,350 traders and managers participated.

The environment of macroeconomic control was not the only aspect of concern to study participants. When assessing the main threats to the Spanish economy, 48% point to legal uncertainty, 44% to political uncertainty and 30% to regulatory changes.

Although inflation has been contained in recent months, there are concerns about rising prices. Two-thirds of respondents (63%) confirm that the impact of price increases in 2023 will be high or very high on their profit margins. In this sense, three phenomena related to inflation are positioned as major threats in business. Next 12 months: demand risk (34%), commodity price volatility (33%) and interest rates (27%).

But despite the prosperous picture of entrepreneurs, the confidence they express when asked about the performance of their companies is surprising: the majority are confident of generating turnover, investment and employment more prudently in 2024. 71% of those surveyed expect their sales to increase in the next 12 months, up from 70% last year, while 53% will increase their investments compared to 50% last year. For their part, 40% plan to increase their workforce, 2 percentage points more than in 2023.

Juanjo Cano, head of KPMG in Spain, assured that “the data provided by the new version of this report”. Spain 2024 Outlook They reflect the same confidence as the last edition in terms of billing, investment and staffing conditions. However, they are also more concerned about the uncertain economic and geopolitical environment, which is why they demand stability, especially in the regulatory sector.

For his part, Antonio Caramendi, president of CEOE, highlighted that companies “need an environment of trust, moderation and understanding, less uncertainty and more regulatory quality and freedom of companies”. We need a framework that values ​​entrepreneurship and the role of the firm as an engine in the creation of wealth and employment, and the prosperity of society as a whole.”

Priorities and Challenges for Entrepreneurship

In the last version Views of Spain, digital transformation was ranked by 58% as the most common strategic priority among entrepreneurs and managers who participated in the survey. In 2024, this will not only be maintained, but will rise to 69%, positioning it as your top business challenge with 63% for the next 12 months. Spanish business leaders are aware of the urgency to analyze, understand and integrate technological innovation into their business strategies.

To maximize the opportunities this change brings, entrepreneurs know that it is essential to have professionals who know how to identify, understand and integrate technology into company operations. Therefore, along with digitization, efficiency confirms its relevance in corporate agendas: 60% of those surveyed included it in their strategic priorities for 2024, and 62% consider it a business challenge.

The head of KPMG highlights the adoption of artificial intelligence as another work tool within companies in this sense: “In less than a year it exploded not only in business circles, but also in society due to its transformative potential. Managers expect a progressive but firm implementation of this technology, with 37% planning to incorporate it in the coming months compared to 17% who already have it in their organization,” he opined.

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