Overall confidence in the Costa Rican economy’s growth is beginning to fall at a faster rate, according to a recent business pulse poll of employers in various industries conducted periodically by a coalition of business chambers.
Despite weaker perceptions of the state of the economy and dwindling confidence of growth, the poll still shows that overall these businesses expect marginal growth in the future, just less than they expected earlier this year.
The Unión Costarricense de Cámaras y Asociaciones del Sector Empresarial Privado, a chamber of associations representing various industries, cited numerous international and internal factors for the decline in a press release. These included the government’s failure to confront electricity and infrastructure issues and its lack of a plan to reduce public spending.
“As the production sector, we believe that for there to be an upturn of confidence in business, there needs to be legal certainty and coherent public policies,” said Jaime Molina, chamber president, in the press release.
According to the union’s director of communications, William Segura, the union has been taking the poll for 14 years and has been coming to the same conclusion about the government over the last four years.
The poll measured and quantified the entrepreneurs’ perceptions of growth this quarter and confidence of growth in the next three months.
The poll also used these values to obtain a numerical value for the economic climate, according to Segura.
“Economic climate is the mixture of perceptions and economic climate,” he said.
The survey found that business owners perceived a 15 percent reduction in business since the first poll this year and that their confidence in the next quarter was down 11 percent, since the first poll this year.
The chamber also said that the government should reduce paperwork and bureaucracy with which businesses must contend.
“One of the urgent tasks as a sector on which we have been working and indicating to the authorities where the bottleneck is related to paperwork reduction, but we urge greater awareness and willingness of all public employees to run a reduction not only in formalities, but in the time taken to analyze, from a recording of a medicine to the procedures for approving loans,” said Molina.
In addition to these cases of government inaction, the press release also blames unpredictable exchange rates, climbing interest rates, less access to credit, growing unemployment and Europe’s unstable economy.
The poll seeks responses only from executive officers of Costa Rican businesses in seven different industries and divided into three groups based on how many people the company employs. This survey was distributed to 493 of these entrepreneurs last month.
The survey asked participants to rate their perceptions and confidence of growth on a scale from one to 10, in which five is the midpoint that indicates neither shrinkage nor growth. Anything below that indicates that business has or is expected to shrink and anything above indicates it has or is expected to grow.
Using this scale, the poll compiled the results and found a numeric value of 5.2 for perceptions, 6.1 for confidence and 5.7 for economic climate, indicating that there is still at least marginal growth in the economy. These values have not dropped below 5 since early 2010.