In order to know which are the most profitable sectors in a country, it is necessary to know how the market behaves in general, he says economic analyst Guillermo Granja, who indicates that it goes hand in hand with investments.
“We must understand that the question of ROE (financial profitability) is nothing more than seeing how much profit is taxed on the shareholders’ investment, since it is a universal gauge for determining the behavior of the sector and, above all, how much these shareholders get for the risk of their capital” , explains Granja.
According to his evaluation Alberto Acosta Burneo, editor Weekly analysis, administrative services, mines and telecommunications were among the most profitable sectors in the country during 2022, reaching more than 15%.
“To calculate ROE, it is important to see profitability in relation to invested capital, i.e. how much the company earns based on what it invests. So, in the report, we show an indicator of profitability on capital, that is, in comparison with what the shareholders have invested, how much they earn, and that is an indicator,” Acosta claims.
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The economist used data from the Tax Administration (SRI), the Administration for Commercial Companies, the Administration for Banks and the Administration for the National and Solidarity Economy to obtain percentages of profitability.
The sector that is at the top of the list are administrative and support serviceswhich consist of general assistance, such as the rent of an export office, herds, says the economic analyst Jorge Calderón.
The farm has other examples, such as caretakers, cleaning staff, accounting problems. This sector has 35.3% profitability.
“It’s a category that is undoubtedly seeing a lot of growth because of its breadth. It creates a kind of help because it’s clearly about rentals, it’s not a big transformation process that exists,” says Calderón, who believes that when the sector ends in 2023, it will maintain that position.
Exploitation of mines and quarries is in second place with 24.7% profitability. “We have large investment costs to be able to exploit a mine or a quarry, and then this means that the profitability is not so great,” says Granja, comparing this sector with the administrative services sector.
In this regard, according to Calderón, the mining and oil sector will see changes in the rest of 2023.
“In the mining sector, disinvestment occurs for several reasons, firstly because you are no longer in the process of investment, but exploitation. And other, popular consultation Chocó Andino and Yasuní (who got the vote for). This puts this type of service on hold and Your profitability is probably much lower. for all those connotations and legal uncertainty that no doubt makes you think,” says Calderón.
|Administrative and support services
|Exploitation of mines and quarries
|Public administration, defense, social security
|Professional and technical activities
|Finance and insurance (except banks, cooperatives and mutual societies)
|Art, entertainment and recreation
|Agriculture and fishing
Public administration, defense, social security is the third most profitable sector in Ecuador. It has 18.4 percent. Telecommunications followed with 16.7%. “It is a growing area,” says Granja.
Professional and technical activities follow with 13.8% and processing industry with 13.7%. The latter, according to Acosta, By 2024, it could be affected by power outages caused by the energy crisis.
“In production and trade, I believe that profitability in the economy will deteriorate next year. These complicating factors like El Niño, power outages, economic slowdown. Next year there is also a complicated issue, which is the closure of Yasuní, which will imply a reduction in economic activity. I think that in general we will see a decrease in the profitability of companies”, analyzes Acosta.
Calderón agrees with this, as he predicts decline in other sectors such as entertainment due to insecurity. “There has been a significant increase in extortion problems that have greatly hurt these businesses,” says Calderón.
The arts, entertainment and recreation sector records 13% profitability during 2022. Before that, financial and insurance companies (except banks, cooperatives and mutuals) are at 13.6%.
In ninth place are agriculture and fishing with 12.7 percent and banking with 12.3 percent.
“There is a whole campaign that banking is the most profitable, the one that makes the most money in the country, and when you see these numbers, you see that this argument is absolutely false, but what attracts my attention is that it lowers it. Although it is not the most profitable and it is slightly above average. But it is the activity that paid the most taxes,” says Acosta.
The average profitability of economic activities in the country is 11.9%, which is very close to the figure for banking, which records 12.3% and puts it in tenth place.
Below 11%, there are other sectors of the economy whose profitability is obviously not very high. There is transportation, social assistance, gas and other things.
Below is the list:
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