Business turnover slows down in 2023 after two years of prosperity

The frenetic pace of economic activity experienced in recent years seems to have peaked. This is reflected in the Business Turnover Index (ICNE) published today by the INE, which shows a 2.1% decrease in the total turnover of companies during 2023. This data puts end to two consecutive years of double-digit growth (24.4% in 2022 and 17.9% in 2021), confirming a moderation in economic growth.

The data reflects that the turnover of the companies It plummeted an average of 14.2% in 2020 compared to the previous year, registering its largest decline since 2009 and the first after six consecutive years of annual increases, due to the impact of Covid.

Slowdown by sectors

He detailed analysis of the ICNE reveals a notable disparity between different economic sectors. The supply of electricity and water was the hardest hit in 2023, with a 28.8% drop in billing. The industry, for its part, experienced a more moderate decline of 1.9%. In contrast, the services sector remained resilient, with growth of 6.2%, while commerce experienced a more timid advance of 0.6%.

It is also worth noting that only in December, The average decline in company profits, except financial companies, fell by 5.9% year-on-yearbringing the indicator to nine consecutive months of year-on-year declines, since last March.

The trade data is also surprising. The fact that it has not managed to obtain good results even at a time of inflation helps to achieve better margins added to the seasonality with a month of high consumption (December), since the profitability decreased on average in that month by 2.8% compared to with December 2022.

Seasonal effects and general trend

When correcting the data for seasonal and calendar effects, the general trend is maintained, although with a slight attenuation. The business billing fell 1.8% in 2023, with falls in energy and water supply (-28.7%) and industry (-1.6%), and increases in services (+6.6%) and commerce (+0.8%).

December: slight monthly rebound

The series corrected for seasonal effects also reflects this trend, with a 3.1% year-on-year drop in company sales in December.

Nevertheless, The last month of the year offers a slight respite, with a monthly increase of 0.2% in seasonally adjusted business turnover. This rebound, although modest, stops the downward trend of the previous months.

In December, and despite leading the podium in profits at an annual level, the electricity and water supply, sanitation and waste management sector (+0.7%) led the monthly growth. At the opposite extreme, extractive and manufacturing industries recorded the largest drop (-0.9%).