Seven out of 10 companies plan to invest

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Seventy-six percent of the entrepreneurs surveyed are planning to invest in next year, according to a survey by San Martín, Suárez y Asociados (SMS) Argentina.

The work, carried out among 97 entrepreneurs, “is in line with a slight recovery of the economy,” but inflation is the “main factor of discouragement,” the report said. One of the key points of the survey is that 54{d0fd1c7f03312cdbde7b5dce5e26cfecaabc8ba26c81c7be42bb4001702752ce} of respondents said they had “inconvenience to find staff with the necessary training”.

SMS Argentina is a national network of professional firms that offers auditing, consulting and tax advice services, and conducted a survey on the productive investments that the business sector plans for the next 12 months. “In line with the recovery of 0.3{d0fd1c7f03312cdbde7b5dce5e26cfecaabc8ba26c81c7be42bb4001702752ce} year-on-year in GDP, reflecting the transition from a recessive context to a slow-growing one, 67{d0fd1c7f03312cdbde7b5dce5e26cfecaabc8ba26c81c7be42bb4001702752ce} of respondents said they plan to invest in the next 12 months,” said report.

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Meanwhile, “only 18{d0fd1c7f03312cdbde7b5dce5e26cfecaabc8ba26c81c7be42bb4001702752ce} responded negatively, and the remaining 15{d0fd1c7f03312cdbde7b5dce5e26cfecaabc8ba26c81c7be42bb4001702752ce} still did not decide, so the positive percentage could increase.”

Also, 64{d0fd1c7f03312cdbde7b5dce5e26cfecaabc8ba26c81c7be42bb4001702752ce} of those who answered by affirmative said that those investments “will be equal to or greater than those made in the previous year.” For the most part, the investments will be concentrated in a combination of tangible and intangible goods, both of national and imported origin. In turn, 80{d0fd1c7f03312cdbde7b5dce5e26cfecaabc8ba26c81c7be42bb4001702752ce} of the respondents indicated that the investments in the industries to which they belong will be equal to or greater than those made in the previous year.

“The survey shows that a good part of these investments will result in the creation of new sources of work, since 31{d0fd1c7f03312cdbde7b5dce5e26cfecaabc8ba26c81c7be42bb4001702752ce} said they will need more staff to complete them,” the study said. Consulted on the origin of the goods in which they plan to invest, 31{d0fd1c7f03312cdbde7b5dce5e26cfecaabc8ba26c81c7be42bb4001702752ce} was inclined by the national, 23{d0fd1c7f03312cdbde7b5dce5e26cfecaabc8ba26c81c7be42bb4001702752ce} by imported and the remaining 46{d0fd1c7f03312cdbde7b5dce5e26cfecaabc8ba26c81c7be42bb4001702752ce} by both options.

Regarding how the investments in the industry to which they belong during the next twelve months will evolve, 54{d0fd1c7f03312cdbde7b5dce5e26cfecaabc8ba26c81c7be42bb4001702752ce} considered that they will remain stable, 26{d0fd1c7f03312cdbde7b5dce5e26cfecaabc8ba26c81c7be42bb4001702752ce} estimated that it will grow and the remaining 20{d0fd1c7f03312cdbde7b5dce5e26cfecaabc8ba26c81c7be42bb4001702752ce} evaluated that they will decrease. According to the same survey, while 51{d0fd1c7f03312cdbde7b5dce5e26cfecaabc8ba26c81c7be42bb4001702752ce} said they expect their future investments to be “profitability that would reach 10{d0fd1c7f03312cdbde7b5dce5e26cfecaabc8ba26c81c7be42bb4001702752ce} per year or more, the remaining 49{d0fd1c7f03312cdbde7b5dce5e26cfecaabc8ba26c81c7be42bb4001702752ce} stated that it would be below the above-mentioned level.”

As for the sources of financing of investments, it was evident that the use of formal channels such as the financial system and the capital markets is still very scarce, since 41{d0fd1c7f03312cdbde7b5dce5e26cfecaabc8ba26c81c7be42bb4001702752ce} said that they will use their own resources, while 49{d0fd1c7f03312cdbde7b5dce5e26cfecaabc8ba26c81c7be42bb4001702752ce} said that It will do so through a combination of several sources.

Meanwhile, 85{d0fd1c7f03312cdbde7b5dce5e26cfecaabc8ba26c81c7be42bb4001702752ce} of respondents agreed that inflation “discourages the arrival of investments.”

“It is possible to assume that, as inflation gradually declines, the propensity to invest increases progressively,” the report said, processed and analyzed by the Corporate Finance team at SMS Buenos Aires, led by economist Ricardo Proganó.

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