Business Confidence Index
The Business Confidence Index, measured and monitored monthly by Deloitte, rose this month and now stands at 99.1 points out of a possible 250, a two-year high.
Business confidence has been boosted by President Rafael Correa’s visit to Germany, Italy and Spain together with his interest in reinitiating trade negotiations with the European Union, as well as the decision to create a Ministry of Foreign Trade as a means of encouraging exports and establishing trade agreements with strategically important countries.
According to the Ecuadorian Federation of Exporters, the principal priorities of the newly-formed Ministry should focus on setting up a national exports plan, an export fund for new technologies and financing facilities for exporters. According to the Deloitte survey, 88% of those interviewed regard this news as positive, particularly among the commercial and service sectors.
Furthermore, the stability achieved with respect to the oil reference price has been favorably received Central Bank of Ecuador figures indicate an average price of US$94.3 per barrel of oil.
Among executives participating in the survey, 66% retained the same optimism as last month, 16% were more optimistic and 18% less so.
In April of this year, Deloitte carried out the 7th Business Barometer Survey in which 738 Latin American executives employing more than 450,000 people participated.
According to the study’s results, expectations among executives remain unchanged: 67% of those consulted believe that the current economic situation is the similar to that of this time last year, 19% think that it has improved while 18% have perceived a decline.
When questioned on perspectives for the forthcoming year, 21% of the group expressed greater optimism 48% see no reason to change their outlook and 32% foresee a worsening economic situation.
The Business Barometer participants were also asked about the overall situation of companies over the next 12 months: 62% predict an improvement, 22% envisage no change and 16% forecast a deterioration Compared with other countries in the region, Ecuador conforms to the average. Panama (71%), Guatemala (69%) and Peru (65%) are the most optimistic countries with respect to next year’s perspectives.
An analysis of sales perspectives included in the Latin American Business Barometer study reveals that 66% of participants expressed optimism, 22% foresee no change and 13% predict a decline.
These figures are in line with the latest Business Confidence Index results. Of those interviewed, 52%reported increased sales compared to the previous month and 62% reported better year-on-year sales figures. Furthermore, 88% are partially or fully optimistic when asked whether sales targets would be met for the current six-month period.