Business Expectation Improves, but Not Enough

Between the third and fourth quarters of the year, the Global Expectations Index reported a 6% increase in Costa Rica, but still remains in pessimistic territory.

Thursday, November 21, 2019

The expectations index improved in all sectors during the fourth quarter, with the services and manufacturing indexes strengthening the most compared to three months ago. Manufacturing and trade activities surpass the pessimistic terrain in which they were the previous quarter, reported the University of Costa Rica (UCR).

The report of the UCR reviews that "... The global index of business expectations for the fourth quarter of 2019 shows a 5.8 percentage points increase over the previous quarter, and is currently at a level of 47.4 (on a scale of 0 to 100) and is the second lowest value of the entire series of quarters since 2010; the overall index has a value lower than the average of the quarters of previous years (is below the average of 7.7 percentage points); it is important to mention that, for this quarter, again no sector exceeds the average of the quarters since 2010.

With regard to the previous quarter, the increase in the general optimism of businessmen originates in the strengthening of the indexes of services, manufacturing, trade and to a lesser extent agriculture and construction (increase 9.3, 8.4, 6.7, 4.5 and 0.2 percentage points, respectively).

In general, businessmen of all sectors attribute this slight improvement in expectations to seasonal factors typical of the time, because of the expected behavior in the demand; likewise, they point out that the economic uncertainty continues in the country so the consumption of people is lower.

Expectations of new investments continue to be low, those of changes in production improve slightly and those of net generation of employment continue to be negative.

See full report (in Spanish).

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