Confidence in the economy of Chilean companies engaged in commerce, hotels and restaurants declines in January 2023

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The confidence of Chilean companies dedicated to commerce, hotels, and restaurants fell last January to a “moderately pessimistic” level due to lower expectations of the economy for the first half of the year, the National Chamber of Commerce (CNC) of Chile released yesterday, Monday.

The CNC’s General Confidence Index for Retail Trade, Hotels, and Restaurants reflects “negative expectations” about the economy for the first half of 2023 by the population beyond what was expected.

“The result evidences that a large percentage of companies experienced and expect to continue experiencing a slowdown during this first half of the year, in line with a more complicated economic outlook, accompanied by internal and external uncertainty,” explained the CNC.

Chamber of Commerce (CNC) of Chile, HQ. (Photo inernet reproduction)
Chamber of Commerce (CNC) of Chile, HQ. (Photo inernet reproduction)

The survey indicator showed a lower performance of sub-sectors such as department stores and supermarkets.

Department stores and supermarkets reached the highest level of pessimism within the items studied, mainly due to the drop in sales compared to the records of 2021, after the partial relaxation of the restrictions due to the pandemic, together with the government’s economic aid to overcome the health crisis.

The companies consulted by the CNC anticipated a possible drop in their staffing levels or a fall in their investments for this year.

Meanwhile, the purchase and sale of automobiles showed a slight improvement in their expectations.

However, 69.2 percent of the businessmen expect the economy to worsen, and 53.8 percent foresee that sales will decrease this semester.

According to the CNC, “the declines are associated with a lower level of sales, both past and future, together with high pessimism about the future of the country’s economy”.

The hotels and restaurants category had the lowest pessimism, due to a better result in the second half of 2022, in line with the good performance of services, with sales up 53.3 percent in the second half of 2022.

The study noted that small and medium-sized companies continued to be the most pessimistic about the economic future, while large companies reported a slight optimism.

However, the economic projection registered the highest level of pessimism for all sectors (53 percent) among the surveyed firms that projected a worsening of activity for the current semester.

The results by sector showed that 50 percent of the companies interviewed noted a slowdown in their sales in the last months, and 43.6 percent foresee a new fall during the first six months of the year.

Regarding hiring, a quarter of the participants in the survey reduced their workforce during the second half of 2022, while 17 percent foresee a new reduction in the future, with an emphasis on large stores and supermarkets.

On the investment side, 36.3 percent of the companies surveyed see declines in the first half of the year, while 19.6 percent see an increase.

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