Nearly three-quarters of businesses in Andalucia expect to increase their workforce over the coming months despite growing concerns over geopolitical tensions and the wider economic outlook, according to a new survey by Deloitte.

The study, which polled chief financial officers (CFOs) from 35 companies across the region, found that 74% plan to gradually expand their headcount, reflecting continued confidence in growth.

The businesses surveyed span a wide range of sectors, including consumer goods, construction, energy, industry, retail, technology and the public sector.

Overall, the findings suggest Andalucian companies remain cautiously optimistic.

Almost four in 10 finance directors said they are more optimistic than they were three months ago, while just over a third said their outlook had remained unchanged.

Family-owned businesses emerged as the most optimistic group, while companies backed by private equity investors were more divided over their expectations.

The survey also points to moderate but steady growth, with businesses expecting both revenues and operating margins to improve, although many warned profitability remains under pressure.

Investment continues, but with caution

Despite maintaining expansion plans, many companies said they are becoming increasingly cautious when making investment decisions.

Finance directors cited geopolitical tensions, volatile energy and raw material prices, slowing economic growth across Europe and rising labour costs as some of their biggest concerns.

Many also highlighted the risks posed by disruptions to transport and logistics, changes to global trade policy, escalating conflict in the Middle East and potential impacts on energy supplies.

Most respondents expect inflation to remain between 2.5% and 4% in both Spain and the wider eurozone – above the European Central Bank’s long-term target.

The majority also described the current level of economic uncertainty as either high or very high, with most saying now is not the right time to take greater financial risks.

Talent and digitalisation remain priorities

Looking ahead, companies said their main priorities include attracting new customers, driving organic growth and improving productivity.

Many also identified digitalisation, cost optimisation, cash flow management and attracting skilled workers as key areas for future investment.

Jose Perez Paniagua, Audit & Assurance partner at Deloitte, said Andalucian businesses have shown resilience despite challenging economic conditions.

‘Andalucian companies are demonstrating their ability to adapt to a demanding economic environment without abandoning their growth ambitions,’ he said.

‘The finance function is playing an increasingly strategic role in decision-making, helping organisations strengthen their resilience and competitiveness.

‘Looking ahead, investing in talent, efficiency and digitalisation will be key to driving sustainable growth and creating new business opportunities.’

Read more Andalucia news at the Spanish Eye.