One in three Spanish companies raised their sales prices between January and March as a consequence of inflation, according to the latest Survey of companies on the evolution of their activity, published this Monday by the Bank of Spain. The rebound has been widespread, although it has been felt more strongly in the services sector, specifically in transportation, leisure, and communication services. The increase in cost reflects a calendar effect, since in many activities the cost adjustment is carried out in the first months of the year. However, another part of this increase has been conditioned by the evolution of the Consumer Price Index (CPI), which, although it has left those double-digit figures that were in 2022 far behind, continues to have an impact on small businesses.
According to this barometer, the majority of companies – 69.8% – believe that between now and the end of the year costs will continue to increase, so it is possible that profit margins will narrow and this will end up having an impact on product prices. sale. María Jesús Fernández, an analyst at Funcas, assures that “at this point, the second round effects are expected to be the main drivers of inflation, especially in the services sector. However, we will have to wait for the next few months to see the evolution of the trend in detail.” For now, the banking supervisor warns that at this start of the year, the one that is most pessimistic is the industrial sector, which appears to be the hardest hit by the blockades of merchant ships in the Red Sea. In a general overview, 25% of Spanish companies have admitted to being affected by this crisis; Of these, half say that the main impact is the increase in freight and insurance prices as a result of route changes, and a third say they have delays in merchandise deliveries.
Wages also appear as one of the causes of the price spike. In fact, 74% of those surveyed expect growth in labor costs throughout 2024 as a result of the difficulty they have in finding workers. Four out of 10 companies are concerned about the low availability of labor, especially in the hospitality, agriculture and construction sectors, where more than half of businesses say they are affected by this problem. The sentiment of business owners, however, clashes with the low rate of existing job vacancies. Eurostat records actually place it at the bottom of Europe – the number of unfilled jobs is 0.9%, compared to the average of the Twenty-seven, 2.8% – although there are specific activities in the that the Government and social agents agree that there are problems in recruiting personnel.
In any case, only 8% of the businesses surveyed believe that there is a strong link between past inflation and wages, while almost 20% consider that the link is partial. It is a figure far removed from the pessimism prevailing since the outbreak of the inflationary crisis, when employers warned that wage increases were going to bring second-round effects, that is, a price spiral. The better attitude in this matter is due to the fact that inflation has been reducing from its historical highs, according to the Bank of Spain.
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