Small and medium-sized companies, the overwhelming majority of the Spanish productive fabric, are beginning to shape their balance at the end of the year, including, as they anticipated, sharp falls in their income. Nine out of 10 confirmed this according to the SME barometer, a periodic study carried out by the employers’ association that groups these companies, Cepyme.
Contrary to what may seem, the main reason that explains this decrease in the volume of income of more than three million companies is not so much the administrative closures decreed to stop the contagion of the coronavirus as the drop in demand, which affects 69% of the total and it represents a problem in the face of the full reabsorption of the 750,000 workers affected by ERTE and the approximately 350,000 self-employed workers who have requested aid for cessation of activity. The first state of alarm that lasted between April and June and the false start due to the arrival of a second wave have definitely affected the volume of household consumption.
The final balance will be made in January, when the current income protection schemes for companies and workers expire and an extension will be renegotiated between the Government and social agents. Meanwhile, what the data collected so far indicates is that, regardless of decisive factors such as the type of activity carried out, size is a variable proportional to survivability. Thus, 23% of medium-sized companies believe that their company’s survival is at risk, a far more favorable outlook than that of SMEs as a whole, which is more pessimistic.
The extension of aid to companies in difficulties will overlap with the waiting for the first remittances of the 72,000 million euros consigned to Spain from the European Union as part of the reform plan for the Spanish economy. Beyond its objectives in terms of digitization or energy, the approach that has been made of the aid is that they must reach precisely the SMEs, which represent 99% of the business fabric. However, an active role is expected from the largest Spanish companies in this distribution, both private and public.
How they will do it and if they will do it on time are the most worrying questions. As for the moment, the Vice President of Economic Affairs, Nadia Calvià ± o, indicated last week that since January her department will have preparations underway. He did it precisely in a ceremony with Cepyme in Madrid where he announced a budget of 2.6 billion euros to support the digitization of small and medium-sized companies and pointed out that the transformation of these businesses must be accompanied by a process in which they grow in size both in terms of turnover and employees.
Although the promises made by the head of Economic Affairs are that there will be support for this process, the start in 2021 can be very hard. The damage caused by the pandemic, the limited capacity and hours in sectors such as hotels and tourism, have pushed thousands of small and medium-sized companies to the limit. In this sense, the Bank of Spain has indicated on more than one occasion that the aid schemes that are in force as of February should facilitate the closure of companies that cannot be solvent.
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