A survey of more 700 medium and small companies across the country has shown that entrepreneurs in this industry are belt adjustment after listening to the measures announced by the minister Luis Caputomany of which are also contained in the project Omnibus law that President Milei sent to Congress on Wednesday.
For SME entrepreneurs, economic measures announced they are going in the right directionbut at the same time they assume that the initial impact will be there a recession scenario: they estimate that it could last between six months and two years.
This is one of the conclusions of an investigation conducted by Pyme Observatory Foundation (FOP), among 734 companies micro (0-9 employed), small (10-49 employed) and medium (50-249 employed) in the agriculture, livestock, forestry, fishing and mining, trade and construction sectors , manufacturing and professional services industries.
The investigation by the FOP, a “think-tank” founded by Roberto Rocca and belongs to Techint Group, was carried out between 19 and 26 December, when a few days had passed since Minister Caputo had announced the Government’s first measures, which included a strong devaluation equal to 55% of the weight and a series of advertisements for eliminate the fiscal deficit.
Although most respondents rated the address andlaunched by the new administration, 75% of them estimate that it will generate a recession iinitial.
58% of entrepreneurs estimate this the decline in sales in the first half of 2024 will be equal to or greater than 30%.. To cope with the recession, 40% will reduce fixed and/or variable costs. Finally, the expectation of companies anticipating recession is that the country’s situation will remain “the same”, while that of the company itself will be “worse”.
As regards the “vision” of the SMEs consulted at the time on the “Caputo Plan”, the results of the survey showed a balance of 55% positive responses versus 28% negative and 18% no response yet.
Even with a majority that approved or at least did not speak out against the measures, three out of four respondents said that a recession is upon us. For 32% it will last 6 months, for 25% one year and for 14% two years. Likewise, 58% estimate that the drop in sales will be 30% or more.
At a sectoral level, those who expect a higher level of recession are SMEs in construction, manufacturing and trade (80%), while in activities such as services and agriculture, pessimism about the level of activity in the short term it covers 56% of those interviewed.
Pessimism also wins when it comes to measuring expectations about how your company will fare in 2024: 46% predict that by December 2024 it will be worse, 34% better and 20% the same.
How do you plan to overcome a year of recession? 40% of those interviewed responded that they will implement a reduction in costs, both variable and fixed, and only 10% will resort to credit during 2024. 15% of companies will apply other strategies, from the sale of fixed assets and inventories, to the early holidays or the more “proactive” search for new markets. The remaining 34% responded like this He hasn’t decided on any strategy yet.
Source: Clarin
