Entrepreneurs predict a better second half but low profitability

Entrepreneurial optimism has bumped into economic reality. The perception of executives for the first semester was the highest in the 22 years that D Alessio Irol conducted a survey with the Institute for Business Development of Argentina (IDEA). But once this period is over, the balance of the frames is like the famous "no positive". 68% of the 230 businessmen surveyed say their situation is much or moderately worse in the first part of the year. However, the results of the June measure show encouraging prospects for businessmen, since more than half (51%) predict a better second half. Tax reform is one of the topics mentioned as essential for the coming months. They also point out that the communication and the conformation of the economic team are the biggest mistakes of the government.

For executives who see their eyes the performance of the past six months, the highest points are in agreement with the IMF, the reclbadification of the Argentina as an "emerging market", the international opening and rising dollar, while those who believe that they are in a "worse" situation point to inflation, devaluation, high interest rates and the exchange rate crisis. the main causes.

"There is a negative perception of the first half, but there is an expectation of recovery," said Eduardo DAlessio during the presentation of the report. Of those surveyed, only 25% predict a semester moderately or much worse, while 2 out of 10 think the performance will not change.

The only economic variable in which entrepreneurs show a positive outlook is exports. 43% say they will increase between moderate and significant, which represents an increase over 31% from the October 2017 survey. This is the product, according to the report, of the Exchange changes. Only 8% indicate that they will decrease.

Expectations in sales and investment are less promising. One-fifth of those consulted trust in increased investment, especially in mid-sized companies. Meanwhile, three out of ten say that they will decrease in the next 12 months. However, the estimated investment as a percentage of annual turnover remains above average in recent years.

With regard to sales, one-third of companies expect to increase (34%), unlike the result of October 2017 that shows optimism in 83% of respondents. More than 40% of executives expect sales to fall next year.

Half of executives (49%) believe that there will be no change in employment. 19% expect an increase, especially small businesses and service companies, while 32% say it will shrink. As of October 2017, only 11% predicted a decrease. Entrepreneurs also expect the profitability of their businesses to recognize the economic turbulence. 48% expect a decline for the next 12 months.