Prices up and profits down, the response of Sardinian companies to the "expensive bills"

The energy crisis has had a severe impact on Sardinian businesses, especially small and medium-sized ones, 95,000 throughout the island, with an escalation in electricity and gas prices which has caused a surge in costs for micro and small businesses companies of over 900 million euros in 2022 , resulting in an increase of +147.1% compared to 2021 .

But small and medium-sized companies have adopted 6 solutions to continue to be present on the market and to work : price increases, profit margin reductions, electricity self-production, plant efficiency improvements, contract renegotiation and, unfortunately, also the reduction and suspension of activity .

This is what emerges from the analysis carried out by the Study Office of Confartigianato Imprese Sardegna on the propensity of Sardinian companies to react to these contrary factors.

The analysis also demonstrated how small companies have a good propensity to invest combined with a strong demand for stable and qualified work . These are the two main factors that have allowed the sector to face the difficulties and maintain a growth path in the first half of 2023.

THE SOLUTIONS – Among the solutions to deal with energy price increases, the most frequent reaction was that of an increase in selling prices , in 57.7% of small businesses and 65.4% of medium-sized businesses. The reduction in profit margins was implemented in 47.3% of cases among small companies and in 50.5% among medium-sized companies. Self-production of energy was implemented in 17.1% of small and 23.9% of medium-sized companies. 13.2% of small companies and 18.5% of medium-sized companies have taken steps to make the system more efficient . 22.2% of small and 28.8% of medium-sized companies renegotiated their contract or changed supplier . Only 6.3% of small and 8.8% of medium-sized companies had to suspend or reduce their activity.

«This analysis tells us how companies have fought and continue to do so by adopting all types of strategies and solutions - comment Maria Amelia Lai and Daniele Serra , president and secretary of Confartigianato Imprese Sardegna - certainly they have not lost heart and have not they are not even pulled back when it comes to giving up part of the revenues».

Finally, Confartigianato recalls how the average incidence of gas and electricity bills in the balance sheets of companies went from 15.8% in 2021 to 28.1% last year , effectively doubling. This has meant that, on average, energy has become one of the most important expenses for Sardinian artisan enterprises.

The derailment of energy prices has also resulted in an erosion of 6.1% of the added value of micro-small-medium enterprises. These shocks were joined by monetary tightening, rising commodity prices and labor shortages.

(Unioneonline/vl)