One in two businessmen now points out legal uncertainty as the main threat to the economy and six out of ten rule out hiring

Marcos Iriarte Madrid

Madrid

Updated Sunday, March 17, 2024-17:18

The sentiment of businessmen, who just a year ago unequivocally pointed to inflation as the great threat to their businesses, has changed radically since then: today,

one in two businessmen

points to legal uncertainty as the main threat to the Spanish economy. in the next 12 months.

The second,

political uncertainty

.

They are communicating vessels.

This is clear from the latest

Spain 2024 Perspectives

report prepared by KPMG in collaboration with the CEOE employers' association and which this year has reached its twentieth edition.

"It is very significant that political instability has become one of the great concerns of the business community due to its impact on legal security, certainty and regulatory stability," warns

Antonio Garamendi.

"A concern that translates into the drop in investment that we are already registering in our country," he adds.

During the last legislature, the coalition government passed

215 laws

.

Many of them were related to labor or tax issues and ended up having their reflection in the operations, processes or even in the income statements of the companies.

For this legislature, the regulatory pace is expected to decrease in intensity, but basically due to the weakness of the Executive and the complexity when closing agreements in the face of political polarization.

In this context, asked about the main risks for the country's economy and, even before knowing about the electoral advance in Catalonia and the resignation of the Executive to carry out its General State Budget project, businessmen fill the podium with the great threats with three problems attributable to policy makers: legal uncertainty (indicated by 48%), political uncertainty (by 46%) and regulatory changes (by 30%).

"The results of the survey show high concern" around these three issues, says Juanjo Cano, president of KPMG in Spain.

"And in the face of an uncertain economic and geopolitical context, business leaders demand stability, especially in the regulatory field," he says.

The survey carried out annually by KPMG and the CEOE is a good thermometer of the real feeling of the country's business fabric due to its sampling.

In this edition, 1,367 businessmen

and managers from 23 different sectors and from all the autonomous communities

participated .

And 49% of them are presidents, general directors, owners or directors of their companies.

"Companies need a climate of trust, moderation and understanding, with less uncertainty and with greater regulatory quality and independence of the institutions," says Garamendi.

"We need a framework in which the role of entrepreneurs and the company as an engine of wealth and employment creation, of prosperity for society as a whole, is valued."

71% expect to sell more

Although the leader of the employers' association anticipates "an uncertain legislature with precarious balances", in which an economic scenario is outlined "with little support for the business world and a budgetary horizon of foreseeable tension", Spanish businessmen trust grow this 2024 in terms of turnover, investment and also, although in a more committed way, in job creation.

Specifically, 71% of those surveyed plan to increase their sales volume over the next 12 months.

In last year's survey, the feeling was practically identical: 70% said they expected to sell more in 2023. On the other hand, the number of entrepreneurs who say they will increase their investments this year also improves (53% compared to 50% from the previous year).

Regarding job creation, six out of ten

do not plan to increase their workforce

this year.

15% even say they will have to cut them.

On the other hand, 40% of the businessmen surveyed do expect to make hires this year, 2 percentage points more than in 2023.

This

optimism

regarding the evolution of turnover and investments contrasts with the doubts still generated by the country's economic situation and the evolution it will have during the year.

For example, more than half (54%) consider that the current situation is "regular" and 45% expect the Spanish economy to get "worse or much worse" before the end of the year.

Another 41%, for their part, believe that it will neither improve nor worsen.

Talent retention and Artificial Intelligence

"In the growth strategies for this year, the progressive integration of generative artificial intelligence in companies stands out, a challenge in the new technological scenario in which companies will have to develop their activity," explains Juanjo Cano regarding the conclusions. Of the report.

And 37% of those surveyed say they will implement generative artificial intelligence "in the coming months", more than double the number of entrepreneurs who claim to have already done so (17%).

Three out of 10 still do not believe it is time, or are not interested, and rule out integrating it into their daily lives this year.

Digital transformation is, as in 2023, the strategic priority most highlighted by Spanish businessmen and is considered the main business challenge for 63% of those surveyed.

Almost at the same time, the attraction and loyalty of talent.

It is identified as the second major challenge for companies by 62%, practically tied for the first challenge.

And 48% of the businessmen and managers who have participated in this survey affirm that the lack of skills and capabilities within the organization is a hindrance to advancing their digital transformation objective.

Six out of 10 (58%) say they have difficulties incorporating the talent necessary to achieve their business objectives and 66% say that talent shortage is today a "risk" for the growth of their companies.