Riojan businessmen foresee a "cold winter" in the economic

Riojan businessmen foresee a “cold winter” in the economic

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The Riojan business fabric predicts a “cold” winter in the economic outlook and a slowdown, derived from the rise in interest rates, financial costs, inflation and the decrease in consumption and sales.

This is how the businessmen who have participated in the La Rioja Business Situation Survey corresponding to the second quarter of 2022, prepared by the Chamber of Commerce and Industry of the Community, whose results have been presented this Wednesday by those responsible, see it.

Six out of ten businessmen surveyed believe that their global expectations will worsen for the second half of the year, said the director general of the Chamber, Florencio Nicolás. The second quarter presents positive net balances in all the variables (turnover, employment and investment) except sales prices, which are -13 percent.

Also, the forecasts for the third quarter also show negative balances for all the variables (turnover, employment and price), except for the investment chapter. The best data, in turnover, continues to be, for yet another quarter, for the Tourism sector with 58 percent.

Construction passes this quarter, and always compared to the same quarter of 2021, with a positive net balance of 50 percent with 65 percent of the companies reporting having increased their sales.

In this second quarter, Commerce is the sector that shows the worst net balance in sales with -13 percent and 48 percent of the sector, which has seen its turnover decrease along with 17 percent that has remained stable.

In turnover, this period closes with positive data for the rest of the sectors: Industry (35 percent) and Other Services (13 percent) and with an aggregate net balance also positive of 25 percent, 6 points more than in the first quarter of the year.

For all sectors as a whole, 44 percent of the companies consulted report that their sales have been higher than the same quarter of 2021 and 37 percent have kept them stable during these three months. 93.2 percent of those surveyed consider that inflation is the main risk, in the medium term, for the economy.

Likewise, 89.8 percent reported having seen their company’s margins negatively affected by price increases. 73.3 percent of the companies consulted consider that the current situation of inflation is not transitory and 86.4 percent fear that it will become structural if the CPI is taken as a reference in salary negotiations.

Likewise, more than half of those surveyed (54.4 percent) see the viability of their company at risk due to the current situation of inflation.
Pre-COVID billing levels have not yet recovered for 51.5 percent of companies, and 63.1 percent of those surveyed rate the economic-financial situation of their business as fair or poor.

Likewise, 54.4 per cent of the participating companies mention that they have external financing and, of the remaining 45.6 per cent, 23.1 per cent have considered resorting to it in the short term. 82.5 percent consider that said increases in interest rates can jeopardize the financing of investments and endanger their execution.

In relation to expectations for the second half of the year, 6 out of 10 companies surveyed believe that their global results will worsen.
The net balances show negative values ​​for all the variables analyzed in this panel: sales -23.5 percent, investment -35.1 percent, employment -14 percent and prices 40.2 percent.

Finally, 96.1 percent believe that it is necessary to carry out a better and more efficient management of public spending before resorting to tax increases.

In an extremely changing context, with very high inflation and a weakening of economic growth, companies do not predict a good second half of the year, since they have not yet recovered from the consequences of the pandemic and the regional GDP is below the national, less than 1 percent has concluded Nicolás.

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