Publications

The article examines industrial and services firms’ direct energy costs as a proportion of their turnover in 2019, differentiating by fuel type (electricity, natural gas and other fuels) and by firm size and economic sector. The analysis shows that the proportional expenditure on different energy inputs is highly heterogeneous across productive sub-sectors. For energy-intensive sub-sectors, there are also differences in the composition of energy expenditure by firm size. In general, the larger the firm, the lower the proportion of turnover spent on electricity and other fuels, but the higher the proportion spent on natural gas.

According to the Central Balance Sheet Data Office integrated database (CBI), 2021 saw a notable recovery in the economic and financial position of most firms, partially reversing the previous year’s COVID-19-related downturn. This improvement was more pronounced in the industries hardest hit by this crisis. Meanwhile, data from the Central Balance Sheet Data Office Quarterly Survey (CBQ), which allow more recent developments to be analysed, reveal that corporate profits for the sample overall continued growing at a brisk pace in the first three quarters of 2022, albeit highly unevenly across sectors. This further bolstered the economic and financial position of most of the firms in the sample. Nonetheless, the data referring only to Q3 show a loss of momentum in corporate profits, reflecting the slowdown in economic activity. This article includes a box analysing recent profit margin developments, using two different approaches. The box concludes that, thanks to the recovery in ordinary profits, the gross value added margin (which measures the proportion of this surplus retained by firms after personnel costs) continued to rise in 2022 for the CBQ overall, to stand at levels similar to the pre-pandemic figures. This is compatible with a slight contraction in the margin on sales, which is calculated as the ratio of gross operating profit to sales and enables analysis of the extent to which firms have been able to pass rising production costs through to their customers.

This article assesses how effective Spain’s furlough schemes were from the start of the COVID-19 crisis in allowing the workers affected to return to work. On average between 2020 and 2021, the absolute probability of workers resuming their activity was high, although the shorter the furlough scheme, the higher the probability: almost 65% for workers who were furloughed for just one quarter, compared with slightly more than 26% for those who were furloughed for three quarters. When compared with workers of identical characteristics who were not furloughed but lost their jobs and became economically inactive or unemployed, the gap is positive, but it also narrows over time. In consequence, the results show that the furlough schemes – especially the shorter ones – were highly effective in the period analysed. However, the longer the furlough schemes lasted, the less effective they tended to be, especially for certain groups, such as younger workers, those with temporary contracts and workers in certain service activities.

This article describes the different consumer credit crowdfunding platform models that are currently operating in Spain and analyses their development and their main characteristics by drawing on granular data publicly available from two of the platforms operating in Spain. The article shows that, while the volume of financing granted by this type of platform has grown at a considerable pace in recent years, its share of the total remains very small compared with bank lending figures. The evidence presented also shows that the risk profile of the borrowers who access this financing is significantly higher than that of those borrowing from credit institutions.

The Central Balance Sheet Data Office Quarterly Survey data show that ordinary profit grew sharply in 2022 H1, with average profitability levels close to those of 2019. These positive economic developments translated into an improvement in the ability to repay corporate debt. For their part, average liquidity ratios declined, reversing the increase recorded following the onset of the COVID-19 pandemic. In any event, a more detailed analysis evidences a less favourable trend for certain groups of firms than that inferred from aggregate data. In particular, the article includes a box showing signs of deterioration in the economic and financial situation of some of the firms most exposed to the rise in energy prices. Specifically, firms whose activity has recovered less in the recent period because they have not benefited as much from the lifting of the pandemic-related restrictions on movement would be in this situation.

Since mid-2021, inflationary pressures have intensified and have spread to various components of underlying inflation, both in the euro area and in Spain. This largely reflects the indirect effect of the sustained increase in production costs triggered by commodity market tensions. Moreover, other pandemic-related factors may have facilitated the pass-through of inflationary pressures: production bottlenecks, the increase in home renovation demand and, more recently, the rapid pace of resumption of activities involving more social contact, after two years of demand constraints. Underlying inflation components related to transport, household equipment and maintenance, and recreation, hospitality and tourism have seen particularly high price rises over the last year, both in the euro area and in Spain. Recreation, hospitality and tourism made a significantly higher contribution to the growth in consumer prices in Spain than in the euro area in the last year, owing to the higher price rises in these components and their greater weight in the consumption basket.

This article examines the impact that some recent events (specifically, the surge in inflation rates and the war in Ukraine) are having on Spanish households’ economic expectations, using information from the European Central Bank’s Consumer Expectations Survey. The analysis shows that the upward revision to household inflation expectations since mid-2021 has fed into their nominal spending expectations, which had been on an upward trajectory until the outbreak of the war. This upward path has been interrupted since the outbreak of the war, which has significantly impacted the expectations for the determinants of household spending: households now expect their income, their financial situation and the general economic situation to fare worse than before the war. Against a backdrop of greater projected price growth, the interruption of the upward trend observed in prior months of household expectations for an increase in nominal spending (with a downward adjustment, in particular, to the projected spending on durables) would entail weaker spending in real terms. In addition, the gap between the forecast growth of nominal spending and that of income has widened since early 2022. Accordingly, households appear to be implicitly anticipating slightly lower saving rates.
The analysis also shows that, in response to higher nominal spending on energy consumed in the home, households with a modest liquidity buffer have reduced their spending on other goods. These households are mostly low-income ones which are also more exposed to changes in energy prices, given that the energy bill absorbs a greater proportion of their income. By contrast, households with a larger liquidity buffer have not significantly changed their levels of spending on other items, which they have funded by temporarily reducing their saving rates.

The global rise in food commodity prices is passing through strongly to the consumer prices that households pay for these products. Further, the current episode has seen a more widespread increase in food items than other historical periods of stress in these markets. The results of an econometric model reveal that a temporary increase of 10% in the rate of change of food commodity prices leads to a rise in euro area headline inflation (HICP) of around 0.3 percentage
points after 12 months.

The Central Balance Sheet Data Office Quarterly Survey (CBQ) data show that corporate earnings and activity continued to recover in 2022 Q1. Against this background, average profitability levels increased relative to the same period in 2021, but remained below pre-pandemic values. The debt of the sample firms taken as a whole grew in 2022 Q1 compared with a year earlier, leading to a slightly higher average debt-to-asset ratio. Conversely, the average ratio of debt to ordinary earnings, which proxies repayment capacity, fell, helped by the recovery in earnings. The increase in ordinary profit also enabled the average interest coverage ratio to continue to decline, albeit at a slower pace than in 2021 on account of the rise in financial costs associated with the higher debt. This article includes a box analysing changes in the profit margins of the CBQ firms during the last year, an important question in the current setting of sharp cost increases. For the median firm in the sample, the profit margin has remained virtually unchanged. However, there is a high level of heterogeneity, not only across sectors, but also within each sector. The differences in the course of this variable are attributable to certain characteristics, such as the growth in costs, firms’ financial position and the buoyancy of their activity.

The Financial Accounts of the Spanish Economy show that the financial situation of households and non-financial corporations strengthened in 2021. Unlike in 2020, households increased their outstanding debt in the form of bank loans, mainly loans for house purchase, in keeping with the real estate market’s greater buoyancy. However, given that household income grew more, their debt-to-income ratio fell by 1.6 percentage points to 91.9%. This remains, however, above its 2019 level. Non-financial corporations’ debt-to-GDP ratio also fell in 2021 (by 4.3 percentage points, to 80%). This was largely due to GDP growth, as their consolidated debt increased slightly. Turning to financial asset investment decisions, households continued the trend of recent years of increasing their holdings of bank deposits and investment fund shares or units, while – in keeping with the recovery in business activity and with lower concern for liquidity risks, respectively – firms granted a higher volume of trade finance and accumulated fewer liquid assets.

On balance of payments statistics, in 2021 Spain’s net lending amounted to 1.8% of GDP (1.2% in 2020). This increase mainly reflected the partial recovery in the travel surplus, thanks to the improvement in the epidemiological situation prompted by the headway in vaccination, and the widening of the capital account surplus, boosted by the credits corresponding to Next Generation EU. This countered the deterioration in the goods deficit, against the backdrop of the rising energy bill. Meanwhile, Spain’s negative net international investment position decreased significantly (to 70.4% of GDP, its lowest level since 2006), thanks to the positive financial transactions with the rest of the world and, to a greater degree, GDP growth and the increase in value of external financial assets. Conversely, Spain’s gross external debt reached another all-time high (€2,329 billion) due to the assumption of new liabilities, particularly by general government and the Banco de España. However, it fell as a percentage of GDP thanks to economic growth.

The latest SAFE results show that the activity of Spanish SMEs continued to grow in the period from October 2021 to March 2022, albeit at a slower pace than six months earlier. The rise in costs prompted a deterioration in profits for most of these firms. Access to external finance is not a factor of concern for most SMEs; indeed, the indicator of obstacles to obtaining bank loans has held at very low values. However, the results show an interruption of the trend of improving availability of bank loans during the period analysed, linked to the SMEs’ pessimistic perception of the general economic environment. In addition, a significant percentage of SMEs reported an increase in financing costs. Against a backdrop of heightened uncertainty generated, among other factors, by the economic repercussions of the war in Ukraine, overall the respondent firms anticipated a deterioration in access to finance for the period April-September 2022.

The COVID-19 crisis has had a significant impact on the economy and affected Spanish businesses’ economic and financial situation, albeit with high sectoral heterogeneity. This article analyses how this crisis has affected business solvency and demographics in Spain by means of various indicators. The analysis shows that to date this shock has had a very moderate impact compared with previous crises, largely thanks to the measures deployed by the economic authorities to mitigate its effects. However, there are some latent risks that could materialise, especially if the economic recovery proves to be less robust than anticipated.

A hypothetical interruption of energy commodity imports from Russia could significantly affect the Spanish economy. The difficulty of replacing these products in the short term would reduce the energy supply and compound the current inflationary episode, both of which would weigh on economic activity. However, since Spain is less energy dependent on Russia than other European economies, the effects on the Spanish economy would be notably smaller. Lastly, the impact would be amplified due to the shock propagating through global production chains, with a particularly marked effect on certain sectors of activity. The interruption of exports or imports of other goods would also adversely affect the European economies, although it would have a more limited impact than in the case of energy commodities.

Since the 2008 crisis, public investment as a proportion of GDP has declined significantly both in Spain and in other euro area countries. That trend recently came to an end, given that public expenditure has been bolstered in response to the health crisis and will be further reinforced in Spain by the EU funds received under the Next Generation EU (NGEU) programme. Public investment’s effect on economic activity will depend, among other factors, on its impact on private investment, the sign of which is, a priori, ambiguous. This article assesses the short-term relationship between public and private investment using the structural vector autoregressive (SVAR) approach. The results suggest that, on average, increases in public investment in Spain tend to generate a positive impact on private investment. In particular, an increase of 1% in public investment would be associated with an equivalent increase in private investment in the short term. This finding underscores the important role that NGEU could play in economic developments in the years ahead.

The COVID-19 crisis has had a very uneven impact on the different productive sectors of the economy, with those requiring less personal contact or that are less labour-intensive, such as industry, being the least affected. This appears to have been a determining factor behind the buoyancy observed in investment in capital goods during the current crisis, as the sectors representing a higher relative share of investment are those that, broadly speaking, have been more resilient. The drive towards digitalisation and e-commerce has also helped cushion the fall in this aggregate in the current crisis, as they require investing in the relevant equipment. Furthermore, unlike in previous recessions, the relatively favourable financing conditions have helped prevent this factor from being an additional constraint in tackling planned investment projects. Lastly, general government has also played a key role in sustaining investment in capital goods during this crisis, given the effort required in terms of digitalisation in order to continue providing services in a setting marked by mobility restrictions and the need to acquire equipment to deal with the health emergency.

Data from the Central Balance Sheet Data Office Quarterly Survey (CBQ) show that corporate earnings and activity increased significantly in 2021. However, the recovery was dampened in Q4 at the firms most exposed to rising energy costs. Against this background, average profitability levels rose significantly compared with 2020, albeit remaining below pre-pandemic values. The overall debt of the sample firms grew in 2021, leading to a slight increase in the average debt-to-assets ratio. Conversely, the average ratio of debt to ordinary earnings, which proxies repayment capacity, fell, helped by the recovery in corporate earnings. The average interest coverage ratio also decreased. This was due to both the lower cost of outstanding debt and higher ordinary earnings. Following the sharp rise in the previous year, liquidity ratios declined at most firms and sectors, against a less uncertain backdrop. The article includes a box analysing recent developments in the degree of financial vulnerability of CBQ firms. It shows that, after the severe downturn in 2020, there was a clear improvement in 2021. However, they remained more financially vulnerable than in 2019.

Since summer 2020, resident banks’ lending to non-financial corporations has been sluggish. In the wake of the impact of the health crisis, this has been against a backdrop of weak demand, a relatively steady supply of bank lending and an increase in financing obtained through issuance of debt securities. An analysis drawing on the granular information both of firms and banks confirms that this loss of momentum in bank lending is explained essentially by demand factors. In particular, there are signs that some firms have been using part of the liquidity buffers they built up in 2020, and that large corporations have replaced part of their bank lending with issuance of debt securities. The analysis also suggests that supply factors linked to the amount of capital available to banks are not an important factor in explaining the weakness of lending to non-financial corporations during the period considered.