The Spanish Confederation of Small and Medium Enterprises (Cepyme) considers that the newly launched business margin observatory “stigmatizes the achievement of business profit.” In a statement issued this Tuesday, the employers’ association of SMEs charges against the figure constituted by the Ministry of Economy, the Ministry of Finance and the Bank of Spain, which it considers “counterproductive for the promotion of the entrepreneurial spirit and culture”.
The observatory opened yesterday Monday with the confirmation that companies have recovered the margin levels prior to the pandemic. Although the joys go by neighborhoods: while industrial companies are still far from their pre-covid margin, the energy sectors have strongly raised their profits in the heat of the energy crisis. The food chain registered some improvement in margins with the coronavirus, but then they lost them as they suffered from the rise in costs for energy and raw materials.
Cepyme points out in its statement that the results for the first quarter of this year do not reflect the Spanish business reality, because they are based on data from nearly 1,000 larger companies: “Therefore, this exercise does not represent a complete sample of the business fabric Spanish, which is made up mostly of SMEs”. 99.8% of Spanish companies are micro, small or medium-sized companies.
In addition, he points out, it is based on the gross operating result of the companies —a financial metric, also known as ebitda, which measures the result before interest, taxes, depreciation and amortization— “which is far from representing the final benefit of these”, given that it does not include the cost of the investment and amortizations, rising financial obligations, impairment of assets and the payment of taxes on profits.
For the employers, the development of the observatory “will be perceived as a future interference in the freedom of business and in the allocation of benefits”, harming the development of the Spanish productive fabric and foreign investment. In his statement, Cepyme affirms that he misses “that the Government of Spain assumes an attitude of defense of the Spanish business community.”
“Without business benefits there would be no economic development because there would be a lack of incentives to undertake, invest and, ultimately, to assume the risks derived from business activity. In fact, it is key to growing, innovating and creating employment”, concludes the employers’ association of small and medium-sized companies.
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