Sat. Mar 2nd, 2024
Business owners are gearing up for a year of increased revenue, but reduced profits.

The latest VISTAGE Argentina Business Confidence Index indicates a bleak outlook for the profitability of the private sector. This index has been in operation since 2006, and the study conducted during the fourth and final quarter of 2023 involved 355 businesspeople, CEOs, senior executives, and business owners who provided their views on the current economic situation in Argentina and its future prospects.

The findings suggest that 83% of respondents believe that the economy has worsened compared to a year ago, while 13% estimate that it remained unchanged. Looking ahead to the next 12 months, 50% predict that the situation will deteriorate further; 37% expect it to improve; and only 13% believe there will be no changes. These results indicate a significant challenge for businesses in Argentina.

Regarding investment decisions, a majority (47%) believes that investment in fixed assets will remain constant in the upcoming year. On the other hand, 31% foresees a decrease in investment, while only 22% anticipates an increase. The high inflation rate is likely to impact businesses’ profitability as well as their ability to invest in growth opportunities. Accordingly, only 44% of participants believe that their company’s turnover will increase over the next year; this is opposed by 32% who expect a decline and 24% who do not foresee any changes at all.

Another critical area of concern for businesses operating in Argentina is employee workforce management. While most respondents (58%) expect no change in their workforce size next year, there are also those who anticipate growth (25%) or reduction (17%). However, despite these challenges, most business leaders remain optimistic about their companies’ future prospects. As Guadalupe San Martín, CEO of Vistage Argentina stated: “The results of our Index convey political-economic uncertainty but do not translate into reduced workforce.” In conclusion, while these findings may be concerning for businesses operating in Argentina, they also highlight opportunities for innovation and resilience among Argentine entrepreneurs.

By Editor

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