In Q4 2018, Spain's Harmonised Business Confidence Index decreased 1.1% year-on-year to 133.9 points, recording its biggest drop since 2013. The percentage of pessimistic businessmen increased to 16.1% while optimists fell for the second consecutive quarter to 19%. Meanwhile, industrial new orders in August showed a year-on-year increase of 7.5% led by energy and capital goods, and services activity grew 7.6% led by trade. Spain ranked 26th out of 140 countries in the World Economic Forum's competitiveness index, dropping one spot from 2017, with leading positions in health and infrastructure but weaker performance in the labor market.

1. 133.9
100
110
120
130
140
Q12013
Q22013
Q32013
Q42013
Q12014
Q22014
Q32014
Q42014
Q12015
Q22015
Q32015
Q42015
Q12016
Q22016
Q32016
Q42016
Q12017
Q22017
Q32017
Q42017
Q12018
Q22018
Q32018
Q42018
7.5 7.5
0
2
4
6
8
10
12
January February March April May June July August
2017 2018
28th
10th
21st
43rd
1st
37th34th
68th
27th
16th
36th
25th
26th
Institutions
Infrastructure
ICT adoption
Macroeconomic
stability
Health
SkillsProduct market
Labour market
Financial system
Market size
Business dynamism
Innovation capability
Enabling Environment
HumanCapital
Markets
Innovation Ecosystem
Optimistic
businessmen
Pessimistic
businessmen
Q1 2018 19.6 17.7
Q2 2018 23.5 12.8
Q3 2018 22.8 15.7
Q4 2018 19 16.1
1.82
1.82
1.79
2.02
1.88
1.83
Aug-18.
Jul-18.
Dec-17.
Spain Europe
5.8
5.94
6.34
7.53
7.35
7.24
Aug-18.
Jul-18.
Dec-17.
Spain Europe
Business perception
In Q4 2018, the Harmonised Business
Confidence Index (HBCI) of Spain
decreased by 1.1% year-on-year to stand at
133.9 points, recording its biggest drop since
2013.
The percentage of businessmen that are
more pessimistic increases to 16.1%, while
the optimists fall for the second consecutive
quarter and are down to 19%.
Business activity
In August (the latest data available), the
Industrial New Orders Received Index
showed a year-on-year increase of 7.5%,
with the energy sector (+36.4%) and capital
goods (+13.6%) in the lead. Likewise,
indicators of the services sector activity
experienced a year-on-year increase of 7.6%,
especially in the trade sector (+ 9.4%).
Competitiveness (WEF)
After the new change in the methodology of
the WEF competitiveness ranking, Spain is
ranked 26th (out of 140 countries),
dropping by one position with respect to
2017 *.
Of the 12 pillars analysed, Spain commands
a leading position in health (1st) and
infrastructure (10th), while it obtains its
worst position in the labour market (68th).
Interest rate
In August, the average interest rate on new
loans for small and medium-sized
enterprises* stood at 2.05%, on par with the
Eurozone, but it increased by 5bp compared
with July.
This trend is also observed in the interest
rate on housing loans and household
consumption, which increased to 2% and
7.3%, respectively (1.8% and 5.8% on
average in the Eurozone).
Business…
at a glance October 2018
Source: Círculo de Empresarios based on INE, 2018
Harmonised Business Confidence Index (HBCI)
Index and % above total businessmen
Industrial New Orders Received Index
% YoY change
* Access to finance of up to 1 million euros
Spain in the competitiveness ranking (WEF)
Position of 140 countries
Source: Círculo de Empresarios based on INE, 2018
* Based on the new methodology
Interest rate on household
consumption
%
Interest rate on housing
%
Source: Círculo de Empresarios based on Bankia Estudios, 2018
Source: Círculo de Empresarios based on WEF, 2018

2. ‘Business at a glance’, a publication of the Círculo de Empresarios produced by its Department of the Economy, contains information and opinion from reliable sources. However,
the Círculo de Empresarios does not guarantee its accuracy and does not take responsibility for any errors or omissions. This document is merely informative. As a result, the
Círculo de Empresarios is not responsible for any uses that may be made of the publication. The opinions and estimates of the Department can be modified without prior warning.
www.circulodeempresarios.org
5
7
11
15 16
0
5
10
15
1995 2000 2005 2010 2015
South to south China to south China to north
South to north North to north TOTAL
34 42
15
4225
226
14
0
20
40
60
80
100
% of largest global
companies
% of largest global
companies (TOP 50)
North America China Europe Others
2,4
2,5
2,6
2,7
2,8
2,9
3
3,1
3,2
3,3
-6
-4
-2
0
2
4
6
8
10
S&P 500 Index cumulative return (left axis)
10-Y Treasury yield (right axis)
In the session of October 24 the index lost all the
profitability generated throughout 2018
World trade in goods
Since 1995, the weight of emerging markets
in world trade in goods has increased 2.5-
fold, from 8% to 20% in 2016.
At the same time, currently, its weight in
world GDP represents 58.7%, 16.6pp higher
than in 1995.
In turn, the aggregate participation by
regions of emerging markets in world trade
of goods exceeds 50% of the world total.
Global business dynamism
In 1950, 77% of the world's leading
companies in each of the industries
worldwide continued to remain in the
vanguard for the following five years.
However, currently, its proportion has been
reduced to 44%.
Between 2012 and 2017, the companies with
the highest growth in their revenue in the
last five years, by region, are in China (54%)
and North America (28%).
Earnings S&P 500
In Q3 2018, the profits of the S&P 500
companies recorded a year-on-year increase
of 19.5% (its highest level since Q1 2011).
By sector, the greatest increase was
recorded in Energy (+91.9%), followed by
the Financial sector (+35.6%) and the
Information technology sector (+33%).
This progress emerges from an environment
of increasing volatility of the S&P 500 that
is explained mainly by the increase in the US
10-year treasury bond yield, the downward
revision of the growth forecasts in Europe
and China, and the consequences of the US
trade policy.
According to Fortune’s Future 501
data,
among the 1,000 largest companies in the
world, 25% are European, a percentage that
plummets to 2% among the Top 50.
Source: Círculo de Empresarios based on Bloomberg and Facset, 2018
Source: Círculo de Empresarios based on Mckinsey&Company, 2018
Concentration of companies by region
% of companies analyzed for Fortune Future 50
1To identify the Future 50, BCG examined 1,100 publicly traded companies
with at least $20 billion in market value or $10 billion in revenue in 2017
Companies with the highest growth in their revenue, 2012-2017
% of companies analyzed for Fortune Future 50
Sources: Círculo de Empresarios based on BCG Henderson Institute, 2018
North America China Europe Others
28 54
8 10
Total goods trade1
by regions
$ trillion
1Total imports of goods
Note: “North to north” it is defined as trade between developed countries,
“South to south” for developing countries
S&P500 and 10-Y Treasury yield
%