Business confidence falls 4% in the second quarter, its biggest drop since the beginning of the pandemic | Economy
The Harmonized Business Confidence Index (ICEA), published this Wednesday by the National Institute of Statistics (INE), has dropped 4% in the second quarter of 2022. This is its biggest drop since the same period in 2020, when it collapsed 26.9% at the start of the pandemic. The decline is due to the drop in the expectations indicator and, above all, to the worsening of the current situation indicator, in a context marked by the war in Ukraine, a high rate of inflation and high prices of raw materials.
Specifically, the balance of expectations —the difference between the opinions of optimistic and pessimistic businessmen— stood at -16.1 points, compared to the drop of 12.8 points registered in the previous quarter. This is due to the fact that the percentage of business establishments that think that the progress of their business will be favorable between April and June of this year stood at 14.5%, a figure lower than that of the previous quarter (14.7%) , while entrepreneurs who are pessimistic about the evolution of their business have increased from 27.5% in the previous quarter to 30.6%. At the same time, the percentage of entrepreneurs who believe that their business will run normally has fallen to 54.9%, compared to 57.8% in the previous quarter.
For its part, the balance sheet, that is, the difference between favorable and unfavorable responses with respect to the final quarter, has worsened more than 12 points with respect to the previous quarter, going from -2 points in the first quarter to -14.4 points In a second. This more negative view of the current situation is the result of the increase in business establishments that think that their business has evolved unfavorably in the last three months and the decrease in those who think that it has behaved positively.
Thus, regarding the first quarter of this year, the ICEA shows that 14.8% of business establishments have a favorable opinion about how their business performed in those three months, compared to 29.2% of establishments that have appreciated a unfavorable evolution in this period and 56% who speak of normality. The ICEA, which is published quarterly and is comparable at a European level, is drawn up from a representative sample of business establishments. During the second quarter of this year, business confidence fell in almost all economic sectors and in all company sizes, as well as in 14 autonomous communities.
Transport and hospitality, the only sector where confidence rises
Thus, according to Statistics data, of the five economic sectors analysed, those that cut confidence the most in the second quarter were Commerce and Industry (-6.8% in both cases), followed by construction (-5, 6%) and other services (-2.1%). The only sector that raised confidence was Transportation and Hospitality, with a quarterly rise of 0.8%. Regarding the size of the establishments, confidence worsened in all of them, especially in companies with 200 to 999 employees (-5.3%) and in those with 10 to 49 workers (-4.8%).
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In establishments with fewer than 10 employees, confidence fell by 3.8% compared to the first quarter. In those with a thousand or more employees, it fell by 3.6%, and in those with 50 to 199 employees, 2.8%. By communities, business confidence only increased in the Balearic Islands (+4.8%), the Canary Islands (+1.4%) and Navarra (+0.2%) and fell in the rest, mainly in Extremadura (-9.2%). ), Aragon (-8.1%) and Galicia (-6.6%). For the elaboration of this indicator, the OECD, the German Ifo index and the Japanese Tankan, prepared by the Central Bank of the Japanese country, are taken as a methodological reference.
