Entrepreneur confidence falls to lowest level since 2009, survey says

By the A.M. Costa Rica staff

The quarterly business survey, known as the "Business Pulse", conducted by UCCAEP, says entrepreneur confidence fell to its lowest level since 2009.

"Business people are not optimistic about the development of their businesses in the coming months when comparing the Business Confidence Index of 5.3 this year, with 6.2 in 2018, there is a significant decrease," said the Chamber in its statement.

“It is evident the production sector is cautious and worried, especially when it indicates that the expectation of economic growth for 2019 is 2.2 percent," said Gonzalo Delgado, president of the Chamber. "It is a reality that a stagnant economy does not produce income for the country, so stronger measures must be taken with immediate effects that build trust and help revive the economy.”

The study also revealed a decrease in the Business Perception Index, which today stands at 4.8 percent. It is the first time in almost five years, this indicator is below 5.0, which means entrepreneurs are already aware of deteriorating activities.

The survey also provides information on three macroeconomic variables and the results are:

- 13 percent of entrepreneurs surveyed believe the real growth of the Gross Domestic Product (GDP) will remain at 2.2 percent as expected by the Central Bank.

- 65 percent believe it will be less than 2 percent.

- Concerning inflation, the majority estimates it will remain in the range indicated by the Central Bank, but it will be closer to 3 percent at the end of this year.

On the labor issue, concerning the estimation of hiring or firing employees, only 1 in 4 company owners said they want to contract permanently. Eight percent say they will lay off employees. The rest of the entrepreneurs surveyed expect to have the same number of employees.

The survey was conducted by telephone to 380 companies in various sectors. It has a 95 percent confidence level and a 3.5 percent error sample.

The interviews were conducted with presidents, managers, financial managers or business owners between July 22nd and 31st.

The study is a statistical panel, which means the same companies have been surveyed since 1996.

More information about survey results can be found at the Chamber's communication department at 2283-7101 ext 112

Related to Government plans for restoring the confidence and optimism to the business sector and citizens, September 9th A.M. Costa Rica published a story about the government's announcement of a National Employment Strategy.

While presenting the strategy, President Carlos Alvarado said his "government has absolute clarity that the most important national challenge is for Costa Rica to generate more jobs."

The plan consists of a diagnosis of the current socio-economic situation and the production of a series of actions to create more jobs.

According to the government, the strategy establishes an investment of $9.5 billion during 2019-2022, for infrastructure, education, airports, hospitals, and security, among others.

Among the main goals included in this strategy are:

- Sixty-eight percent of the total budget will be invested in infrastructure (i.e. roads, or bridges).

- 29 percent will be invested in public services like healthcare, energy, water, education, and housing projects.

- The government will present Congress with a bill authorizing the Ministry of Education to build schools on land not titled in the Ministry's name.

- The government will also create a decree to accelerate the process of public investment.

- The strategy also includes the recently passed Law on Strengthening Competition Authorities, which seeks to create better conditions for competition among companies.

- The creation of a credit line for small businesses.

- Also included as part of the strategy, is the Only Essential tourism campaign designed to attract more tourists from the United States and Canada.

In June, President Alvarado announced more than 3,000 jobs would be created while the government simplifies procedures for companies.

The president signed a decree that creates the National Employment System (SNE). The SNE is a public organization that will coordinate employment services to generate new jobs for people who are in a more vulnerable condition.

The SNE will be headed by a council made up of government representatives, workers, and private companies.

In addition, the National Employment Agency was created. It will be in charge of the National Apprentice Institute, which will have branches throughout the country available to both people and companies.

The SNE will support people looking for a job by creating a database of candidates, providing training, and by being the intermediary before and after hiring.

"Today I commit myself to do everything in my power to generate employment opportunities for Costa Ricans. I know that we can do this," said President Alvarado.

According to the National Institute of Statistics and Census, from January to August the unemployment rate was 11.9 percent. This is equivalent to 296,000 unemployed people.

In addition, the percentage of people with informal employment was 44.9 percent. This is equivalent to 971,000 people with informal jobs.

Informal employment includes those who work or generate income outside a formal work environment. Informal employment includes street vendors, gardeners, and domestic service workers, among others.



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What should government authorities do to increase the amount of jobs available to Costa Ricans?  We would like to know your thoughts on this story. Send your comments to: news@amcostarica.com

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