February was a hard month in sales and with low confidence

In February, the deterioration in trade sales deepened, which led Fenalco to conclude that the “household and business purchases have cooled off.”

(Consumer confidence fell slightly in February 2023).

79% of the businessmen reported that their sales were the same (48%) or lower (31%) than those obtained in the same month of the previous year.

Meanwhile, only 21% stated that they managed to increase their transactions in the second month of 2023. “According to the figures in our Economic Log, February has been the worst month for trade in the last two years. With this result, the sector has now reached five consecutive months with unfavorable results”, said the president of Fenalco, Jaime Alberto Cabal, when analyzing the results of the monthly survey.

For the merchants union, in addition to the difficulties that have already been mentioned, such as inflation, the price of the dollar, and high interest rates, last month were added the logistical problems derived the closure of the Pan-American highway to the south of the country and the continuous marches, demonstrations and in some cases blockades, which put an additional brake on trade.

(Businessmen’s warning: labor reform would impact employment).

“The demonstrations on February 14 and 15 in the main cities, as well as the taxi driver’s strike, drove away the clientele of restaurants and shops in general on those dates. They were lost days for a good part of the retail trade”says the analysis.

According to Fenalco, in the balance of risks, businessmen now ponder the marches and street protests, which have become daily bread.

After the negative results of February, the outlook is unfavourable.

The survey showed that while 25% of those consulted affirm that business will improve in the next six months, the other 75% express their reservations: 35% believe that the situation is going to get worse and another 40% believe that the business climate will be the same as it is currently experiencing.

“The market is cautiously pessimistic, with the addition of the noise that a labor reform project is beginning to generate that would significantly increase personnel costs in companies,” explain the analysis.

(Unions find it difficult to agree with the Government on the labor reform).

Compared to last year, it is seen that the intensity of the problems that impact business activity has variations. Although the first place is maintained by the cost of acquiring merchandise for 22%, last year 26% considered it so.

Instead, The low demand that was a cause for concern for merchants a year ago increased to 18% last February.

In the Fenalco survey, concerns about credit costs due to the increase in interest rates are also reflected in businessmen.

Last year, this issue concerned 5% of the merchants and by February of this year it extended to 12% of those consulted.

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