The latest Business Confidence Index reveals Argentine businesses face a pessimistic outlook for profitability and investment as inflation, declining sales volume and uncertainty loom over the private sector.

Entrepreneurs are getting ready for a year of increased turnover, but decreased profitability

The latest edition of VISTAGE Argentina’s Business Confidence Index reveals a grim outlook for the profitability of the private sector. This index has been prepared since 2006, and the study corresponding to the fourth and last quarter of 2023 included 355 businesspeople CEOs, senior executives, and business owners who gave their opinion on the current economic scenario in Argentina and the future of their organizations.

According to the measurement, 83% of participants consider that the economy worsened compared to a year ago, while only 13% estimate that it remained unchanged and just 4% believe that it improved. Looking ahead to the next 12 months, half (50%) think that the situation will get worse; just over one-third (37%) who will be better; and 13% predict no changes at all.

When it comes to investment in fixed assets for next year, over three-quarters (47%) expect it to remain unchanged; nearly a third (31%) anticipate a decrease; while only about one-fifth (22%) foresee an increase. With high inflation involved, almost half (44%) believe their company’s turnover will grow in the next year; around one-third (32%) predict a decline; and just under one-quarter (24%) do not expect any changes at all.

In terms of sales volume in the next year, about half (43%) estimate that it will decrease; just over one-third (31%) expect an increase; while nearly one-sixth (26%) believe it will remain unchanged.

The Business Confidence Index also includes estimates related to profitability. Over half (55%) of respondents predict that profits will fall in the next year; over one-quarter (26%) expect them to remain stable; while nearly twenty percent anticipate an increase.

On product price movements in the next year, six out of ten business leaders forecast that they will rise; about one-third expect them to stay constant; while almost twenty percent predict they will decrease. In addition, most surveyed respondents are confident about their workforce size: more than half say it will remain unchanged next year; nearly a quarter say it could reduce slightly or significantly. However, there is uncertainty around other issues such as finding and hiring new talent or training existing staff effectively.

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