Results of non-financial corporations in 2018 and in the first three quarters of 2019

According to the annual survey of the Central Balance Sheet Data Office (CBA), the activity of non-financial corporations remained on an upward trend in 2018, although it was a more moderate one than in the preceding year. The quarterly survey (CBQ) suggests that this slowdown intensified in the first nine months of 2019, which translated into smaller increases in ordinary profit and employment than in the previous year. In this connection, the return on ordinary activities, which had increased slightly in 2018, remained relatively stable in the first three quarters of this year. Extraordinary costs and revenues, meanwhile, had a positive impact on the net profit for 2018, but had the opposite effect in the first nine months of 2019. Also a change in trend is observed in the financial position of corporations, insofar as average debt ratios continued to decline in 2018, but rose in the first nine months of 2019. Finally, the debt burden ratio declined in both periods, driven mainly by the ongoing decline – albeit at a slowing pace – in financial costs. This article includes two boxes, the first of which analyses the economic and financial performance of SMEs on the basis of data to 2018. The second box studies the degree of financial vulnerability of the Spanish corporate sector and its sensitivity to a hypothetical deterioration in the macrofinancial scenario.