For the first time since 2020, business people in Puerto Rico are feeling more pessimistic about the current and future state of the economy, according to the latest result of the Business Confidence Index. Prepared by Estudios Técnicos, Inc (ETI).
The data was released yesterday during the Puerto Rican Chamber of Commerce Conference (PRCC), which is being held at the Caribe Hilton. According to the results, businessmen do not see that the economy will improve in the next 12 months.
The expectations index – which measures how they perceive the future – has recorded the most variance since the survey was last conducted in the second half of last year. The drop was -8.4 points from 71.9 points in November 2021 to 63.5 now.
32.5% of business people think the economic situation in Puerto Rico will be worse in the next 12 months, which contrasts with 22.1% who thought so in 2021.. 22% think it will be better, 45.5% think it will be the same (41.9% think so last year).
This survey was conducted between March and May 2022 Through an online survey. Completed by 124 EntrepreneursMost (45%) of them have business in San Juan. On average, these companies They’ve been in business for more than two decades, and five out of 10 have fewer than 20 employees, which means they’re an SME.
The business sector may be frustrated with the ups and downs they are going through to run their business. Inquire about who they are The three things that affect their operations the most, 50% answered are energy cost, closely followed by understaffing (not getting staffed) mentioned by 48%. In third place was the tax burden of 46%.
However, when separating the response according to the number of employees, the tax burden is what affects SMEs the most, followed by staff shortages and energy costs.
“These are worrying signs, as the survey reflects that the economy is entering a slowdown phase,” said Cristina Vargas, director of market strategies at ETI.
Vargas noted that companies will continue to increase sales, but at a slower pace. “Companies will be more cautious about hiring new employees and expansion plans,” he added.
Although business people are less optimistic about the current and future economic situation, fewer believe Puerto Rico is in a recession (57% now versus 62.5% in November 2021).
Impact of COVID-19
At this point where the COVID-19 positivity rate remains above 20%, he was asked whether 16 companies have had to stop operations in the past six months due to the Corona virus (13%) said yes. Of those, seven had to shut down for a full six months.
Additionally, more employees (76%) contracted COVID-19 in this period than they did in November 2021 (52%).
In terms of business operations, this time there are more companies offering their products or services online than they were in 2021. (71% now vs 65.4% last year).
Looking ahead, 9% said their employment level would decrease in the next six months (only 3% thought so in November 2021)and 48% would not make any changes to the template. 11.3% expect sales to decline, and 57.3% expect to increase, although not as optimistically as in November 2021. And 14% will reduce purchase orders, while 52% indicated that they will increase it.
Small and medium companies vs. large companies
It should be noted that the survey revealed significant differences in the past six months in terms of sales and the level of staffing, depending on the number of employees of the company. for example, Sales increased more for companies with 20 or more employees than SMEs (47% vs. 17%).
In terms of employees, companies with 20 or more employees increased their workforce significantly more than SMEs (38% vs. 15%).
However, in the next six months, SMEs look somewhat more optimistic than companies with 20 or more employees, whether in sales, ordering or at the employee level.