The Business Confidence Index closed the second quarter of this year with a result of 68 points, the lowest indicator for five years, reported the latest survey conducted by Vistage, the network of CEOs and executives.
He indicated that this result is even lower than the level registered at the beginning of the COVID-19 pandemic, in the first quarter of 2020, when business confidence fell to 77 points.
“Undoubtedly, this marker reflects a combination of external and other local factors, such as high global inflation, logistical problems with merchandise, and warnings about a scenario of economic recession in the United States and Europe that are beginning to leave a mark on the Peruvian expectations”said Ignacio Mealla, director of Vistage Peru.
Economic indicators
In addition, 85% of the business leaders consulted perceived a substantial setback in economic conditions in Peru.
The report stressed that this is the second consecutive quarter in which a deterioration in the local economic context is observed, adding 22 more points to the perception of economic worsening, compared to the previous quarter.
Only 7% of businessmen expect the economy to improve in the next 12 months, while 55% believe it will get worse.
The analysis mentioned that this negative reading on the Peruvian economic context is due to the increase in production costs in different industries and the adjustments in electricity rates, without neglecting the fall in the international price of copper, the decline in mining exports due to social conflicts, and the decline in non-traditional exports, such as agricultural products.
In this context, CEOs and general managers are increasingly concerned about the purchasing power of Peruvian households and the risks for private investment, as reflected by the Peruvian Institute of Economy (IPE) in its economic thermometer.
Investment caution
Regarding these projections, Peruvian executives consider it important to remain cautious regarding the investments to be made in the coming months.
Faced with this, 53% of the general managers answered that they will maintain the same investment levels, while 30% evaluate the option of reducing them in the short term, a figure that has grown by 4% compared to the previous quarter.
Only 17% of the leaders consulted expect these investments to increase in the remainder of the year.
On the other hand, the members of Vistage Peru hope that their companies, distributed in different economic sectors, can overcome the difficulties and continue with a good level of billing.
43% of CEOs bet on growth in their turnover, a figure that also decreased compared to the previous quarter, which represented 56%. In that sense, the number of business leaders who project a decrease in their billing levels became larger, reaching 20%, compared to the first quarter of this year, when only 13% of them projected this decrease.
Despite the weak expectations about the economic recovery, 58% of managers have decided to keep their payrolls stable in the coming months, even though the creation of new jobs is one of the most affected in the short term, according to the Peruvian Institute of Economy (IPE), which reported a slowdown in the recovery of jobs between March and May, stating that it is necessary to create more than 290,000 jobs, only in Metropolitan Lima, to return to pre-pandemic levels .
“With this scenario, it is clear that the perception of the health of the Peruvian economy has worsened compared to previous years. However, the CEO’s and owners of Peruvian companies continue to work on the creation and implementation of various recovery strategies, taking into account that there is still half of the year remaining with its two stellar moments from the commercial point of view: National Holidays and the end of the year parties, so not everything is said regarding the situation of the Peruvian economy”Mealla remarked.
