A rising quarter on the radar of businessmen

Companies see their possibilities with different eyes after the change of command. According to the Monthly Survey of Macroeconomic Expectations: December 2022, prepared by the Central Reserve Bank of Peru (BCRP), most of the business indicators recovered last month, although there was a consensus around low levels of sales, production and days of unwanted inventories.

In total, 5 out of 6 indicators of the current situation of companies remained pessimistic. Only the business situation points as of December and the level of demand progressed, from 48.6 to 50 and from 36.7 to 37.3, respectively.

The coup can be explained by the high level of social conflict registered in December. Sales level fell from 46.3 to 42.9; production, from 46.5 to 44.4; buy orders from 43.6 to 42.7; and the days of unwanted inventories went from 12.7 to 16.

However, the horizon looks brighter in the long term. Businessmen’s expectations about the economy in general in three months went from 37.9 to 42.4; and of the economy at 12 months, from 43.3 to 54. Also the forecasts for the sector in which each company surveyed works: expectations at 3 months improved from 42.8 to 47.1; while those of 12 months went from 49.5 to 58.5.

Will there be work?

Although three-month expectations for the business situation rose from 46.4 to 48—even longer progress for 12 months, with an advance from 54.3 to 59.4—product demand this quarter remained negative and it fell from 49.3 to 48.9, with a recovery expected in just 12 months: from 56.3 to 62.7 points, the best level reported.

However, job expectations are also reserved. The contracting of personnel for three months fell from 46.5 to 45.7; although they rebounded from 48.2 to 53 points in the 12-month period. Finally, the investment foreseen by the companies for three months lasted from 46.5 to 45.7; while at 12 months they rose from 51.9 to 55.3 points. Christmas left little or nothing.

A second quarter that could be angular

Focus. Jesús Salazar, president of the SNI

Businessmen see this new cabinet with optimism, but we wonder if it is enough, and if it is not necessary, in addition, to find a climate of peace in Peru. This was an atypical Christmas due to the social upheaval, especially for the micro and small industry trade. As much as a truce was given, a campaign is not carried out in two weeks. There is a preparation issue that, unfortunately, did not give the results expected by everyone.

However, the SNI evaluates its partners quarterly and we agree with the BCRP, so we hope to reach a new pact for governance, investment and reactivation, which we will present this Monday at the National Agreement meeting. If approved, we expect to overcome this situation in the second quarter.