How many zombie companies are there in Spain?

During the pandemic, the term became popular “zombie company”. The label is attached to those companies that survived the crisis thanks to public assistance. Without that funding valve, they would have rolled down the shutters.

There has been much speculation as to how many there might be in Spain and how to discover them. According to the consensus, a zombie company is considered to be one that operates in a chain for two consecutive years without offering sufficient profitability to be able to meet its obligations and, consequently, resorts to greater financial borrowing to avoid closure.

According to a recent analyst report at iberinformbranch office Credit and caution, there would be about 48,000 companies of this type in the country, 3,360 in Galicia (7% of the total number). They take financial resources out of the system and increase the risks of non-payment in the value chain, say their experts who They predict a progressive increase in this list due to progressive tightening of financing costs resulting from the European Central Bank’s (ECB) decision to increase interest rates. “Their existence can condition the development of the economy, since in the long term they have an uncertain future, they multiply the risks of non-payment in their activity with the rest of the production tissue, and the prolongation of their activity prevents the redistribution of resources to more efficient companies”, they warn.

In which sectors are there the most? According to their studies, construction (22%) and trade (21%) they concentrate most of the businesses that survive on assisted breathing. They are followed by manufacturing industry (14%), other services (11%), catering (10%), transport (5%) and fishing and agriculture (3%).

Size also matters when it comes to mastering holes. Larger companies have greater bargaining power and more sources of financing. Because 57% of all zombie businesses are micro-enterprises. 30% are small businesses. 9.2% are medium and only 3.9% are large. The fact that the risks of non-payment are concentrated in smaller companies reduces the risk that their closure can bring to the entire production chain.

Galicia is the fifth autonomous community with the most zombie companies, only behind Madrid (21% of the total), Catalonia (19%), the Community of Valencia (10%) and Andalusia (9.9%).