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Business confidence sank last March to its worst level since the start of the statistical series , in 2013, due to the coronavirus crisis.

75% of the companies surveyed by the National Statistics Institute (INE) believe that their business expectations for the quarter that runs from April to June are poor and, therefore, the evolution of their business will be unfavorable . Conversely, only 3 out of 100 companies believe that they will have a positive evolution in the coming months, while the remaining 22% do not foresee major changes in their activity.

"The difference between the percentage of favorable and unfavorable responses, called Balance of Expectations, stands at 72 points for the whole of Spain, compared to 5.9 in the previous quarter," explains the public institute in a press release.

The registry of pessimistic companies multiplies by more than three the latest confidence data referring to the first quarter of the year, when 21% of companies were pessimistic about the evolution of their business in a context of economic cooling such as the one that the country was going through so.

The INE figures contrast with those published yesterday by the Sociological Research Center, which indicated that the economic situation of almost 70% of citizens is currently "good or very good".

The business confidence index is a key indicator to measure the economic evolution in the short term. A bad figure, such as that of this month of March, anticipates a collapse of investment by companies due to the drop in activity and the consequent reduction in employment.

Business pessimism is widespread and spreads across all sectors and across companies, regardless of size. In the case of small companies with less than 10 employees, the crisis is more acute. A 83% of these micro or autonomous believes that its business will worsen until at least June, while in the case of groups of more than 1,000 employees is reduced to 53%.

The greatest fear on the part of smaller companies is common in confidence surveys as they have fewer financial and operational tools to save their business at the current level of economic uncertainty.

The survey was carried out between March 16 and April 3 , once the approval of the state of alarm by the Government was known. However, it leaves out relevant economic aspects that happened after that date such as the European agreements to re-boost the economy or the IMF report that draws for this year the biggest economic collapse in the country since the Civil War.

Recovery in the form of "U"

The INE survey joins another one published this Thursday by the E&Y consultancy that also denotes the pessimism of, in this case, the great world executives regarding the economic situation. In this case, the interviewees distrust the rapid economic recovery in the form of a 'V' that the governments proclaim and glimpse a longer period of economic crisis.

"Most executives (54%) believe that the economic recovery will be" U "shaped, with a slow period of activity until 2021, while 38% believe that it will be" V "with a return to Normal activity towards the end of 2020. Only 8% think it will be in "L" with a period of recession where activity would not pick up until at least 2022, "the report said.

The survey also anticipates the drop in profits and margins that most companies will experience during this year. "The survey reveals that 49% of executives stated that their profit margins will be equal to or less than those of two years ago," he highlights.

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  • Covid 19

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