Confidence indices fall, but there is encouragement to generate employment

Confidence indices fall, but there is encouragement to generate employment

Although the business and industrial confidence indices for Fedevelopment show falls in March, business dynamics for the coming months seem favorable to the extent that there is provision for job creation.

(Business confidence ended 2021 slightly down.)

This is what the Fedesarrollo Business Opinion Survey warns, which yesterday presented the results at the end of the third month of 2022. The Commercial Confidence Index (ICCO) it stood at 35.5%, which meant a drop of 1.9 pps compared to the previous month, when it was at 37.4%. In the third month of 2021, this indicator was at 38.7%.

It details that the decrease is explained by an increase of 3.5 pps in the level of inventories (it went from -2.0% in February to 1.5% in March). And there was a decrease of 3.2 pps in the indicator of current economic perception of companies. In March 2021 it was at 51.2%, in February 2022 at 63.7% and in March at 60.5%. However, the component of economic expectations for the next six months showed an increase of 1.0 pps . Last February it was 46.5% and in March of this year, 47.4.

For its part, the Industrial Confidence Index (ICI) reached 13.6%, 1.9 pps less than the previous month (15.5%). In March of last year it was at 6.8%.

(Challenges and opportunities of the new government regarding e-commerce).

“Despite the fact that the current volume of orders registered an increase of 7.4 pps – between February and March-, the drop of 10.3 pps in production expectations for the next quarter (from 40.7 to 30.4 between February and March) and the increase of 2.6 pps in the level of inventories – from -5.7% to -3.2% explained the decrease in the confidence of industrialists”, said the analysis.

Regarding the performance of both indices, the executive director of Fedesarrollo, Luis Fernando Mejía, explained that “the fall in the Commercial Confidence Index was mainly due to a 3.5 pps increase in the level of inventoriescontinuing the upward trend of recent months and reflecting the moderation in sales in the retail sector that characterizes the first quarter of the year”.

Likewise, he commented that “the outlook for the growth of the industrial sector continues to be favorable for 2022, even though the Industrial Confidence Index reversed its upward trend. In fact, the current volume of orders showed a significant increase in the month of March and inventories remain at historically low levels”.

Fedesarrollo makes reference in its report to the expectations of employment generation in the industrial sector. In March, the balance on employment expectations for the next quarter was 16.1%, an increase of 4.3 pps and 6.7 pps compared to the previous quarter and the same quarter of 2021, respectively.

(Industrial confidence falls, but there is improvement in commercial confidence).

According to Fedesarrollo, the disaggregated results show that 18.1% of those surveyed believe that the generation of employment in the industry during the next quarter will increasewhile 2.0% consider that it will decrease and 79.9% affirm that it will remain the same.

In addition, the perception of industrialists about the presence of contraband activities was -7.3%, which constitutes a decrease of 10.3 pps compared to the previous quarter and represents the lowest level reached since March 2021. There , 14.1% of those surveyed stated that smuggling in the January-March quarter increased in relation to the previous quarter, 64.6% maintained that it remained the same, and the remaining 21.5% considered that it was lower.


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