Business expectations improve, but little confidence in the economy drags down investments

The expectations of Peruvian businessmen improved or remained static in May 2024, but low confidence in the management of the country’s economy for the coming months forced them to delay their investment forecasts.

In detail, business expectations regarding the economy The country’s total for the next three months fell from 50 to 48 points, while twelve-month expectations fell from 60 to 55.

For everything else, there is slight progress, except for investments. For example, expectations for sector where the companies surveyed are developed improved from 50 to 52 points for the next three months, and from 59 to 60 in the twelve-month horizon.

Similar scenario with the situation of the company itself in the future, which briefly improved from 50 to 51 points in the short term, although it remained static above 61 points in the long term.

Refering to product demandexpectations for the next moving quarter remained at 55 points, but decreased slightly for May 2025 from 66 to 65 points.

The recruitment It is another indicator of reactivation of the economy. In this section, three-month expectations remain at 49 points, while, at twelve, they improve from 54 to 56. A mixed reading from businessmen, but they remain on the edge of optimistic territory.

Finally, the expectations of investment Projected by Peruvian businessmen for the short term fell from 51 to 49 points, while the twelve-month marker recorded a fall from 57 to 56. A bad sign, since a greater recovery was expected compared to previous months.

BCRP: the real situation of companies in May

Let’s now see the reading of businessmen regarding the situation of your company last May. According to the BCRP survey, the score for business performance remained at 47 points for the third consecutive month, that is, on pessimistic ground.

The sales They did rise, and recorded a progress of 50 to 53 points, probably due to holidays such as Mother’s Day. Production also had a significant advance from the previous 50 to the current 55 units.

However, the demand compared to what was expected went from 38 to 39 points, well below the aspirations of local businessmen. There is still little return on previous investments. Weak recovery of domestic demand?

Finally, the purchase orders compared to the previous month they went from 48 to 51 points in May, and the days of unwanted inventories -an indicator to know the low turnover of products- went from 15 to 16.

The data

• Greater than 50 points (neutral position) means that confidence is in the optimistic section and less than 50 points in the pessimistic section.
• The days of unwanted inventories show the difference between the days of inventories corresponding to each month minus the days of desired inventories according to the companies.