29% of industrial SMEs have reduced employment during the year of the pandemic despite furlough scheme

A 29% of the Catalan industries of up to 250 workers have reduced their workforce during 2020, despite the mechanism of the temporary regulation of employment (ERTE, Spain's furlough scheme), whose main goal is to maintain employment, according to a study presented on Wednesday by the employer Pimec. Despite everything, the president of Pimec, Josep Gonzalez, has positively assessed the extension of the furlough scheme of the Spanish government until May 31, but has again asked for a review of the companies' obligation to maintain jobs for six months once they are helped by the scheme.

The study was presented by the economist Modest Guinjoan, director of the Observatory of Pimec, and reflects the impact of the pandemic in the industrial sector, with loss of turnover and profits, as well as lower exports. But it also shows a more optimistic perspective of entrepreneurs on how they face 2021. The results of the report "invite optimism", the president of Pimec said.

According to the study, in addition to the 29% of industries that have reduced staff in 2020, there are 22% of companies that have increased it and almost half have kept it thanks to the furlough scheme, according to Guinjoan. Despite everything, the balance is negative: there are more companies that have cut jobs than companies who have created jobs. The year before the pandemic broke out, most companies in the sector planned to create jobs.

Other consequences of covid-19 in the industrial sector are that two thirds of companies lost turnover: 42% exported less and 34% sold more abroad. And more than half (54%) reduced profits, 29% increased them and 16% maintained them. The pandemic has not reduced investment much either: 40% of companies have cut back on investment, 39% have increased it and 19% have maintained it.

Market changes

The pandemic has caused a change in the markets, because it has increased the weight of sales in Catalonia and the rest of Spain, while exports have decreased. Sales in Catalonia were 46% of the total, while a year earlier they were 44%, and those in the rest of Spain rose to 24% last year, and in 2019 they were 22%.

Despite an "exceptional" 2020 that "has broken the dynamics of previous years", according to Modest Guinjoan, the study reflects a certain optimism for 2021. Thus, 59% of industrial companies expect to increase turnover, 39% believe that exports will rise, 37% will increase investments and 24% of companies expect to expand the workforce and 67% maintain it. Only 9% believe they will have to reduce jobs.