Main data
88% of managers who believed that the Spanish economic situation is worse than the European
80% of respondents think the situation in our country is more negative than the world
87% believes that the short term, in six months, the economy will be equal to or worse than now
50% believes that improvement in Spain will not start up within a year
63% business has made or will make adjustment to costs over the next year
43% companies that reduced staffing in 2009 also made redundancies in 2010
17% reduce their investments as a tool to conduct a cost-cutting
44% expect their sales will decline and only 17% believe that their sector is doing well
An approaching 2010 fraught with uncertainty and mistrust over the economic situation. The start of the crisis are long and guess the coming year will not be easy, especially in regard to employment. The business class is one that seems to have become clearer. 85% of Spanish executives believe the national economic situation is "bad or very bad", the poll ‘Perspectives’ by the consultants KPMG and has had access to ABC. In the next six months, 55% of respondents estimated that there will be no change in the situation and 30% believe that we will be worse. Pessimism, which contrasts with the last messages launched from the Government. In recent weeks Zapatero has recovered his usual optimism of the hands of Economy Minister, Elena Salgado, who has long argued that the positive growth returned in the first quarter of 2010.
In light of the data, the valuation of the Executive has been met with skepticism by Spanish entrepreneurs. Managers who think the economic situation will remain the same or worse in a year 52% – still above those who trust in a prompt improvement-47% -.
This approach fully fits also with the estimates made by the European Commission for Spain. While the major economies in the third quarter soared, Germany and France 0.7% Italy 0.8% – our country will not drag their red numbers over next year.
Further escalation of unemployment
The executives also consider that Spanish companies have lost competitiveness and imposing cuts continue gastos.Con this horizon, the adjustment measures adopted to deal with the crisis do presage the bleeding of unemployed, 2009 will have its own replica in 2010.
According to INE figure of 23 October last year, the number of unemployed increased by 1,524,600 people in the last 12 months, data links to the views of managers when they indicate that almost half of the adjustments made in their firms in 2009 were geared to a downsizing, a logical process in an environment with fewer customers and less investment.
46% of the managers who made adjustments last year used this measure on other-refinancing of debt, capacity adjustments, etc. …- as way to reduce costs. 43% say they will leverage the same method in 2010, which heralds a new wave of unemployment. In particular, one in five respondents or 21% of the total declared that this year will lay off part of its workforce.
"Although the major staffing adjustments and personnel costs have been made in 2009, and even before, in the vast majority of business prospects for the first half of 2010 are forcing organizations to have a ‘plan B’ if the recovery does not show evidence from the middle of 2010, "says Pilar Nieto, area director in KPMG’s advisory business in Spain.
Falling sales
Consumption remains stalled and business expectations have not improved. So much so that 44% of firms expected a decrease in net sales over the previous year, compared with 22% who think that 2010 will reactivate the economy and will encourage purchases.
86% of the technology industry executives expect a decline, perhaps as a result of the postponement of purchases of equipment and technology. The divestiture, after adjustments of capacity, is the third option of executives as a means of controlling spending. (See chart at right).
The first consequence of declining sales is felt in full force in the distribution sector. 100% of the companies in this sector has made some adjustments last year or planned in the next. Again, the predominant decision-63% – was to reduce staff.
The financial sector, meanwhile, seems to have passed through the eye of the hurricane. The world of finance crisis opened summer 2007 and at this stage, due to the enhanced relief measures, carries a more positive balance. About 75% have not prepared or will not provide adjustments in 2010. Over 30% of its management expects to see growth in net sales for 2009 compared to the previous year. A percentage above the average 22% – the twelve areas audited.
Sectoral Perspectives
The automotive sector leaves behind a dismal year, with declines in enrollment that will exceed 50%. The plan has breathed oxygen Renove manufacturers and dealers, and some indicators such as production of capital goods and industrial vehicles registration point to a fall from contention yet.
After the bursting of the bubble, the construction and real estate has been adjusted. However, 63% of managers believe that in 2010 still will have to implement adjustment measures. By contrast the infrastructure sector, encouraged by the plan of the Ministry of Development, has strong growth prospects. The star of Joseph Blanco project includes investments worth 15,000 million euros by the end of the term with a mixed public-private financing. The development of tourism has not been very favorable. The solution to the crisis of our major source markets gives optimism to a sector that has been cut by 8.6% in the accumulated annual foreign tourist arrivals. Regarding the next six months, 50% of respondents believe that in six months the industry will hit bottom and then begin his recovery. 100% of its managers estimate that in one year will be better.
In the energy business, 80% of the companies that responded to the questionnaire has made adjustments in 2009, but these have been particularly targeted at refinancing and divestiture. According to respondents, these adjustments appear to have improved their situation and that only 20% have a negative view of market development.
Again the reality and the picture drawn by the executive branch of Zapatero seem to find common ground. The report revealed that Spanish managers, rather than recovery, expected by 2010 a road full of thorns.
Tags: pessimism, elena salgado, fraught with uncertainty, redundancies, spanish executives, economic situation, economy minister, mistrust, kpmg, year 63
