Private sector confidence remains lukewarm

July 28, 2016

The confidence of Costa Rica’s business sector remains low, as does its perception of President Luis Guillermo Solís, according the latest survey from the Union of Private-Sector Chambers and Associations (UCCAEP), released Wednesday.

UCCAEP’s Business Confidence Index for Q2 2016 remains stagnant at 6 out of a maximum of 10 points. The figure has remained nearly unchanged for the past two years.

The survey collects opinions from private firms distributed in seven production sectors. This time research found that employers from three sectors, tourism, commerce and construction, showed a slight increase in confidence from the previous quarter.

Confidence among employers in the services, industry and finance sectors declined, while confidence in the agriculture sector remained unchanged.

UCCAEP leaders said perceptions about the country’s situation will mostly be reflected in lower levels of investment and hiring for the upcoming months.

Only a quarter of surveyed employers said they are planning to increase staff in the next twelve months. Nearly 70 percent said they are not considering any changes in staffing levels.

Among those considering adding more employees, 41 percent said they plan to hire semi-skilled workers, 15 percent will hire technical workers and 13 percent will recruit professionals.

Most respondents, 88 percent, said they are not considering layoffs in the next year, while 8 percent said they planned to cut staff.

UCCAEP President Franco Pacheco said the government has neglected the private sector and that the country’s current fiscal uncertainty does nothing to promote investment.

“The constant changes in tax policies promoted by the Finance Ministry only foster uncertainty and confusion,” Pacheco said during the presentation of the survey results.

Solís gets tepid rating from private sector

UCCAEP also asked employers to rank the performance of both President Solís and the Legislative Assembly on a scale of 1 to 10.

Neither of them ranked well: Solís received a 5, while lawmakers received a 4.4.

A majority of employers, 66 percent, said their main complaint is that the executive and legislative branches lack an articulated agenda aimed at improving the country’s business climate.

The survey included responses from 460 CEOs and CFOs. Most of them, 70 percent, work for local companies. The survey has a margin of error of 3.6 percent and a confidence level of 95 percent, UCCAEP reported.

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