Despite rising inflation and high customs duty, Latin American economic prospects have continued to brighten by the day, according to a new survey by TNS Gallup. Almost half of the executives surveyed believe that their business is better today than a year ago, especially in Chile (64%), Mexico (63%) and Colombia (51%).
More than 69% of small and medium-sized businesses believe that the region’s economy will grow strongly over the next 12 months. In a similar survey conducted in 2011, only 62% of respondents had expressed confidence in seeing growth in their business. The survey was conducted for UPS Business Monitor.
“We are seeing businesses betting on their own countries and region through their investments. Nearly half of Latin American executives surveyed do not feel that the economic and financial context of developed countries will affect their businesses showing real confidence,” said Romaine Seguin, president of UPS Americas Region.
Nevertheless, SMEs in the region appear to be facing the same hurdles they had pointed out in the previous study. For example, Brazilian SMEs remain concerned about finding and retaining qualified personnel, while Argentine executives continue to mention an increase in labor costs as their top worry. This year, Colombians showed that market slowdown is their main concern.
“Latin America has come a long way over the last few years; they have a new sense of self, both politically and economically, and you can see this in the optimism revealed by SMEs across the region,” said Eduardo Gamarra, professor of Latin American and Caribbean politics at Florida International University.
More than 80% of respondents said they believe adoption of information technology (IT) would boost their competitiveness, but only 14% of them said they are giving priority to the IT over the next 12 months. At regional level, investment in marketing and sales is a top priority.
Many SMEs see customs duties and the search for suppliers as the two most significant challenges, while a few others considered fiscal constraints (46%) as their main challenge followed by the economy and inflation (41%). The study was conducted in Argentina, Brazil, Chile, Colombia, Costa Rica, Dominican Republic and Mexico.