The report, spearheaded by the economist and writer FeAgainst the backdrop of Catalonia’s current political and social conflict, more than a hundred executives from companies with a presence in the region participated in a study that aimed to determine the business community’s outlook on recent political events, the direct impact that these events have had on sales and forecasts, and most importantly to develop a series of concrete proposals addressed to the Spanish and Catalan governments, as well as society as a whole. The final goal is very clear: to avoid further damage to the economy. 

 

Refem Empresa, Refem Catalunya (“Let’s remake business, let’s remake Catalonia”) is an initiative of the economist and writer Fernando Trías de Bes. ESADE chose to collaborate on the study and help to spread awareness about its results. Francesc Xavier Mena, Professor of Economics at ESADE, collaborated on the project to guarantee the study’s methodological rigour and to certify the reliability of the executives and professionals included on the anonymous panel of experts.

 

The main conclusion of the study is that the executives find themselves in a sort of limbo, with frozen budgets (in 46% of cases) and a high risk that their companies will have to hire fewer workers in 2018 (a step already being considered by 24% of respondents). In any case, a majority of respondents are confident that the political conflict will not worsen (92% said they believe that it will remain the same or improve after the elections). 

 

“It is very noteworthy that one in four executives acknowledges that budgets are being slashed and that fewer people will be hired next year, and that nearly half of respondents have suspended investments in the run-up to the elections. In this context, the way in which the Catalan conflict is managed over the next few months will be decisive for the region’s economy,” commented Mr. Trías de Bes, who also lectures at ESADE. 

 

 

The other relevant aspect of the report is the list of proposals that the more than 100 participating executives made to the Spanish and Catalan governments, as well as to Catalan society as a whole. The panel drew up a series of suggested measures for the Spanish government (accept that the conflict is not just legal but also political; lead an in-depth revision of the Constitution; guarantee fiscal ordinality in regional financing) and for the future Catalan government that will take office after the elections of 21st December (respect the law; ensure that Catalonia does not leave the European Union; avoid unilateral measures). 

Eighty percent of the executives surveyed said their degree of economic concern regarding political events in Catalonia and for economic and business prospects was high or very high; indeed, the respondents expressed more concern about the political situation than about business matters per se (such as competitors). In fact, more respondents expressed personal concern (91%) than professional concern. 

Impact on sales

Forty-three percent of the executives surveyed said that their company’s sales have not been affected, while 56% said sales have fallen. The average change in sales reported by the executives between September and November was a decrease of 9.5%, with most of the drop taking place in October. In the opinion of the respondents, the reasons for this drop in sales were discouragement or apathy towards consumption; a reduction in tourism or retail traffic; external distrust and insecurity; cancellation or delay of events and purchases; and boycotts of Catalan products. These are clearly reasons that can be redirected.

The survey identified major problems related to commercial relationships and the loss of customers. Nineteen percent of the executives surveyed said that their company had experienced some type of commercial boycott, mainly from outside of Catalonia. Among executives of large or multinational companies, one in three reported experiencing some sort of commercial rejection. It is clear that commercial relations need to be rebuilt, a process that will require time and institutional support.

Barcelona’s brand and Catalonia’s image have lost some of their international appeal, according to the executives surveyed. Ninety-eight percent of the executives surveyed said that the current situation and the political prospects have affected the internationality of the Catalan economy. The factors of most concern to the respondents include foreign direct investment, Barcelona’s brand, mergers and acquisitions and other corporate operations, and the Fira de Barcelona. The respondents called for an international image campaign to be carried out as soon as possible in order to counteract these issues.

Transfer of headquarters and legal security

Fifty-eight percent of the executives surveyed said that at least one of the more than 2,000 companies that moved their headquarters out of Catalonia is either a client or a supplier. Regarding the possibility of the respondents’ own companies moving their headquarters, the responses show that, by and large, no decisions have been taken regarding further changes. Most of the companies that moved their headquarters did so essentially for legal reasons (30%) or in response to uncertainty (21%); in other cases, the companies wished to remain under regulatory protection (19%). In a minority of cases, the move was prompted by commercial pressure from customers (15%).

If Catalonia were to make a unilateral declaration of independence or once again embark on an independence process without the agreement of the Spanish state, 42% of the executives said they would totally or partially transfer their companies, while 31% would reduce their investments in Catalonia either totally or partially. Only one in four executives said that their business would not be affected. The surveyed executives openly called for the abandonment of unilateral measures and for assurances of EU protection. 

Technical details of the study

Over a two-week period, Refem Empresa, Refem Catalunya brought together more than a hundred professionals and executives who freely and voluntarily offered to share business and economic information on the conflict in Catalonia. Professionals of all political persuasions were involved in the project. What unites them is an interest in preserving jobs, investment, turnover, ensuring that Catalonia continues along the path of economic growth, and avoiding a recession and the destruction of the Catalan business community. The initiative was not political but rather purely economic and business-related. The sample is representative of Catalan executives across all sectors and at companies of various sizes, as well as the full range of political opinion. The size of the sample and the representation of all sectors of activity endows the study with sufficient statistical validity.