The Bank of Spain confirms that, in the first half of 2022, “the turnover of companies grew at a very high rate, reflecting both the recovery in activity and the increase in sales prices”. And that this evolution “translated into an improvement in the profitability of the companies [la capacidad de convertir los ingresos en beneficios]”, according to the results of the latest sample of the Central Quarterly Balance Sheet (which includes 920 companies).
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“Despite the notable increase in production costs, business surpluses [los beneficios] they expanded at a high rate, and levels were already very similar or even somewhat higher than those existing before the COVID-19 crisis”, continues the Bank of Spain in a report published this Thursday.
Between January and June 2022, the net turnover of companies increased, in nominal terms, by 48.3% compared to the same period of the previous year, compared to the 12.6% increase registered a year earlier. And “also the gross value added (GVA, which can be translated as profits) in nominal terms increased by 18.8%, compared to growth of 10.5% the previous year,” the institution states.
This strong growth in profits means that, as a whole, the companies have managed to improve their margins or profitability, which is also shown in the Bank of Spain report.
“The breakdown by sector shows that, between January and June 2022, most of the branches registered a recovery in profit (GVA), highlighting the growth of the industrial sector (48%), the retail and hospitality sector (25.4% ) and the aggregate that encompasses the rest of the activities (24.5%), within which the good behavior of transport companies stands out”, he details.
“On the contrary, the energy branch experienced a 9.4% drop in profits (GVA), an evolution that reflects the negative behavior of the electricity trading companies, which in many cases would not have been able to fully affect their prices. of sale the increase in the costs of inputs”, adds the institution.
These differences mean that if, as a whole, the 920 companies of the Quarterly Balance Sheet that the Bank of Spain studies, already exceed the pre-Covid benefit by 1.3%, by sectors, above all, industry and commerce and the inns, while in the specific energy segment “electric power generators” do so, with margin improvements of up to 25 percentage points.
This information underscores the need to agree on wage increases in our country, given the loss of purchasing power of workers and families while companies are improving their margins, as a whole, by transferring the increase in costs that are not personnel (energy, raw materials, intermediate goods) at final prices, to the consumer.
That is to say, the companies are entering more and earning more without raising salaries, which is why the unions are asking for salary increases and a broad income agreement, which must include “containment of business profits, which will imply talking about taxation, and protection of the most vulnerable, both in the energy market, as well as in the mortgage or food market”, as clarified this Wednesday Unai Sordo, secretary general of the CCOO.
He and Mariano Hoya, from UGT, appeared this Wednesday after meeting with the Government and the employers with the frustration of “not being very clear what the Executive is referring to with an income agreement.” The majority unions reiterated the need to negotiate an agreement on wage increases, although they consider that the Government maintains an “aseptic” position and that the employers will not change their refusal of the safeguard clauses without the mobilization of the workers.
The union proposal for a wage increase continues to imply a reference framework for the next three years and safeguard clauses to protect purchasing power during that cycle, but without having to do it all at once, to avoid the feared inflationary spiral.