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20 years

Business confidence sinks to lowest level in four years

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December 11th, 2014 (InsideCostaRica.com) Business leaders are leery of the year ahead, according to a number of surveys released this week.

 

According to the Costa Rican Chamber of Commerce (CCCR), business confidence has sunk to a four-year low, while a number of other surveys show that few companies plan to add additional staff in the near future.

 

CCCR said that companies have not seen a clear direction on the country’s economic policy that would encourage investment and job creation.  In addition, business leaders point to legal uncertainties, including a number of bills working their way through the Legislative Assembly that “threaten private, domestic and foreign investment and thus job creation.”

 

In addition, companies continue to be extremely concerned over the high cost of electricity and fuel, according to the CCCR.

 

The latest example comes from Costa Rica’s largest cannery, Sardimar, which laid off 90 workers on December 4th, and directly attributed the layoffs to high electricity costs.  Sardimar said it was forced to lay off workers in order to afford increases in its electricity bills, and that the rising cost of electricity has put the company at a competitive disadvantage due to low energy costs in other countries.

 

At least two surveys released this week, including a survey by Manpower, suggest that just 15% of employers plan to add staff in the next six months.  However, 10% of employers plan to reduce their staff during the same period, which would result in real job growth of just 5%.

 

Meanwhile, a number of sectors expect net negative job growth, including the manufacturing, construction, and service sectors, according to Manpower.

 

Such weak hiring demand is especially concerning considering that the commercial sector alone lost 2,099 jobs between January and October, according to data released by the CCCR.

 

Meanwhile, sluggish sales in a number of sectors have added to the business sector’s pessimism.  The sale of vehicles, construction materials, food, beverage, and tobacco have suffered the worst slowdowns, according to the CCCR.

 

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  • prdatki

    You can trace all of the problems to a corrupt and over paid Congress.Why do they get $200 a day for food, huge retirements and bonuses.Cut the pay by 50 % to the top 1000 people at ICE and AWY.
    Audit all government employess no one should make over $3,000 a month no benefits for Congress no retirement,Elect, gasoline and water should be cut by at least 33%.

  • Ginger Morris

    Costa Rica Government has shot themselves in the foot. Intel, Brands T-shits, just closed 1,400 jobs. The C.R. Governments inability to stop stealing from the good people of Costa Rica for their own empire. Crappy roads, traffic jams, Costa Rica Bridges Falling Down, the most expensive Gas in all America, Electric and lets not forget the 15% taxes and the airport taxes and the Gas taxes that we never see. Hell No, who wants to invest in C.R. or start a business. Costa Rica has tried to alien themselves with the USA in their taxes, banking, traffic cameras and on and on. But Costa Rica you are not the USA or have the Roads or infrastructure to compete with the USA quality of life. Lets not forget the MILLIONS that the USA send here to C.R. Where is all that money going? Where? I said where? USA stop sending money here, it goes to foreign bank accts, not to better the lives of Ticos or Ticas… just Governement-tiosssssssss.

  • Rusty

    I know of four businesses , Restaurant like soda, two bars and a pizza place in the last 3 months closed. Government inspectors looking for pay offs even though everything was done correctly and all the papers. We will see how many others fold after this holiday seaason I am sure more to come. Taxes on food, licenses, sq meters of their business, food handing permits, city permits Liquor licenses and payable every quarter then the salaries for the workers, caja and so on . No wonder the prices here are steep!

    • HONEST MAN

      Don´t go into business in CR you will be bleed dry by all the corupt official and goverment aka mafia. I know i am in business Costa Rica and the goverment scares me now i will close my small business down after christmas. Mafia state is very nice way to put CR goverment.

      • Rusty

        Sad it has come to this point. Every job here for the locals is important for THEIR livelihood.. Jenny’s also a Tico closing her pizza and small store here in our barrio in Jan. Government taxes are kills any business and her profit margin..

        • HONEST MAN

          Just purchased little land in Panama very cheap 2000 s meters for 12.000 dollars already planting potatoes and vegatables. A panama farmer and i working together. Always have a plan B.

      • duke ster

        I told this story before but here it is again. These Ticos deserve to go down in flames! When ICE had a strangle hold on all cell phone operations ( I had just returned to CR in those days – around 4 years ago) I was busy finding a place to rent and getting adjusted to moving here and forgot to pay my cell bill on time. Ice sold me their cheapest cell phone, it cost around $300 to $400. Because I was a week late paying my bill, they cut my service and when I went in to ICE to try to pay,they couldn’t seem to hide their glee at telling me I was cut off for 6 months, my number had been forever deleted–NO SERVICE for 6 months as a penalty and then I would have to re-apply and go through the long wait and office visit etc etc all over again. WTF? Even a Tico I knew who worked for them previously, went in with me and went behind the offices to speak with the manager who told him that it was true, that–NO service for the Gringo for 6 months as a penalty. So when I hear that Ticolandia is going to hell in a hurry, I can’t seem to help myself feeling that what goes around comes around. These people are truly pieces of SHIT, their petty jealousy, greed, lying, cheating, dishonesty and false pride, STUPIDITY, did I mention that these asswipes are truly DUMB? Yes each one working in the government or any position of power over the average citizen or Gringo will rob, steal, cheat, lie, and be as dishonest as they possibly can in order to be as lazy as possible while lining their pockets as best as they can …..DESERVE what is coming,… and that is coming fast and in spades! How these stupid assholes have managed to stay afloat as long as they have is truly amazing and I am sure it is in no small way been possible because of the Gringo influx of money for so many years. Well now that the USA is in the grips of a major depression and only just now starting to really take effect, Costa Rica will be going down in FLAMES with alarming speed. These self serving, selfish, dishonest lying stealing, lacking of any manner of social manners, false pride, two faced soul less beings will come into their come uppance with a speed reserved for God’s judgment on such evil spirited devils. Watch and see it unfold. Be especially careful because any Gringo will soon be a target of these dangerous idiots–remember, you are a “guest here”.

  • Yeims

    Have you checked out the price of the marchamo this year? Because the persons dreaming up and making the laws make obscene salaries, they somehow figure the ordinary citizen can cough up these extremely high charges. Some people are calling this the “Mafia Government” because of the way they regularly enforce high contributions on the part of private, decent citizens — or pay the consequences.

    • Karen Mata

      28 bucks in Panama, and the car inspections are a thing of beauty. No reservation, 2 minute visual inspection.

      • mhogan

        Yeah, ain’t it a hoot! Five minutes inspection: “nice car” (of course my vehicle is only 1 year old), pay $10.60; then onto the Municipal Office to get your new plate and sticker for the year – another 5 minutes including time to pay – $41.00 (how come you only paid “28 bucks”?) Less than $52 for annual inspection and equivalent of marchamo. Great deal. And a crisp new plate every year. The bugger of the thing is trying to remove last year’s sticker – spent 1 hour getting it off before I could apply the new one. They have to do something better than this!

        • Karen Mata

          Total costs are 28 for inspection, about 40 for the plate, and insurance (i take the max for liability) ran 230 last year.

          My car is not new, but a nice 4X4 diesel. The inspection runs a few minutes.

        • Karen Mata

          Concerning the sticker, I just continue plastering the windshield as I did in CR. There’s a small crack that I can see through to drive.

      • HONEST MAN

        Its the same price the only thing is Panama goverment is very quick to do anything.

  • HONEST MAN

    Here is what is really happening in Costa Rica. Big US corp are leaving Costa Rica because they can´t get a great deal anymore this causes lots of local companies to close and layoff staff in CR. Right now INTEL,B OF A,HANES and many more have caused a big economic crisis with all there layoff i expect HP will layoff after the christmas season so expect thing to get very intresting in CR. IF HP cut 50% of there staff in CR that would be 4000 CR out of work and would make CR a dead country for 10 to 15 years. To blame power company for the problems is a bunch of BS. The goverment of Costa Rica cannot manage anything. Health care aka Caja and Mopt is so corupt they make the mafia look nice. Expect Banks to layoff soon this will be the really test when banks go bust in CR. The PLN goverments brought in US corp to Costa Rica they didn´t think that that they are profit driven and if the US companies don´t make enough money they cut staff and run. PLN thought big public companies can help the truth is there so bad they they do more harm than good. President José María Figueres loved to bring US corp to Costa Rica but he never thought they would leave because of cheap labour and low taxes. PLN have screwed this Country up for so long it might take 20 years to show some type of other system. I just planted my first garden and now i have my own food bring on the nightmare.

  • Ken Morris

    I understand that dour news is more appealing than good news, and that a set of ICR commentators are convinced that CR’s economic sky is falling, but did nobody note the results of the Manpower survey of employers? According to it, employers plan to hire more than they will lay off. Nestled beneath a dour headline and tucked into an equally dour story is actually evidence of anticipated business growth coupled with new hiring.

    Sure, business always grumbles. Doesn’t everybody? Sometimes the grumbling is even warranted. But the business news is actually good.

    • http://insidecostarica.com/ Timothy Williams

      Ken, this is probably my fault for not elaborating more in the story, but the news is not positive year-on-year. The same Manpower survey a year ago showed 24% of businesses with hiring intentions, versus 15% this year.

      Likewise, Manpower notes that the 15% who do intend to hire in the next six months are for the most part seasonal hirings for the tourism high season. Sectors that are not seasonal – manufacturing, retail, construction – are all showing net negative job growth for the next six months.

      I never paint a story negatively to attract pageviews; the fact is the data this year shows a negative trend.

      • HONEST MAN

        How does Manpower know everything? Most companies in CR a speak with are saying lets wait and see what the CR goverment does. Do we really think manpower knows everything. Tim again the story is great keep up the good work.

        • http://insidecostarica.com/ Timothy Williams

          The figures are from a number of sources, not just Manpower, including the CCCR, the University of Costa Rica, and others who have all released surveys this week.

        • http://insidecostarica.com/ Timothy Williams

          BTW, you are correct. 75% of businesses are in “wait-and-see” mode. (15% hiring, 10% firing, 75% wait and see).

      • Ken Morris

        Here’s the Manpower report for the first quarter of 2015:

        http://www.manpowergroup.com/wps/wcm/connect/ef69a2c6-d7d5-436f-9d13-f762d9734398/CR_EN_Q1_2015_Release.pdf?MOD=AJPERES&CACHEID=ef69a2c6-d7d5-436f-9d13-f762d9734398

        While this may refect seasonal hirings in tourism, it follows the Christmas seasonal hirings.

        Whereas it may be true that staff reductions are usually greater than forecast, this is a critique of the survey, not reporting on it.

        Year-on-year you may have a point, but the facts seem to be that anticipated hirings are to be up from now.

        It’s also likely true that that in other surveys business pessimism is high. All I want to point out is that despite this, more businesses plan to hire and expand than fire and contract.

        I have no interest in promoting the view that the CR economy is great. However, I do notice that plant closings and the like always get great coverage, and those who comment never forget these, but hirings and expansions don’t get equivalent coverage. It’s not ICR, but what everybody does.

    • HONEST MAN

      Did you read the story? Costa Rica is moving backwards they need 7% growth to keep up with people that need jobs. The growth rate right now is 2.1% and falling faster and faster. World bank is now commenting on CR and IMF is watch thing very close. The business news is not good its just not the facts.Costa Rica’s top diplomat in Washington and the World Bank’s top regional official agree on just about everything: President Luis Guillermo Solís – in office now for seven months – must cut spending, boost tax collection and cut the nation’s fiscal deficit-to-GDP ratio, which appears unsustainable in the long run.

    • Larry Worsham

      What I noted, Ken, is that they gave the percentage of employers that were planning to hire and fire but not the number of employees involved in that process. I think that would have been a better representation of the actual figures in the overall process.

      I see that Timothy clarified that to some extent in his response below.

      I enjoy your posts. You take the time to insure your comments are readable, unlike so many others. It always deters from the point being made when a commentator doesn’t understand minimal punctuation or the difference in words that sound the same but are spelled differently.

      • El Torito

        Those words to which you refer are called homonyms.

      • Ken Morris

        Interesting point, Larry, You may be onto something.

      • Ken Morris

        PS. Let me add a thanks for the grammar part, especially since I’m now using a 15-year-old $90 computer that was cast off from a Nicaraguan internet cafe and doesn’t have a spell checker. I know I’m letting more mistakes get by me than I did when when I had a state-of-the-art computer with a spell checker, but I’m trying.

        • Larry Worsham

          I was referring to words like your, you’re, were, we’re, etc. These are things that spell checker won’t catch and that we learned as youngsters in grade school. I should also note that I failed English in High School and couldn’t graduate as a result. In college that was the course that kept me from a 4.0 gpa (back when 4.0 was the maximum grade you could get). Although I majored in Electronics and Business I ended up working in the publishing industry for thirty years, really taking advantage of all that English I didn’t understand when in school!

          • Ken Morris

            Yeah, and to my shame I wrote “capital” when I meant “capitol” in another response to you, something a spell checker wouldn’t catch but I knew and just screwed up.

            My line of work, more or less, is writing, so multiple times I’ve dealt with finicky editors and picked up a few things. Unlike you, I also did reasonably well in English in high school and college, though my standards were lower than yours and I probably came out with a B in most courses. I also never took any advanced grammer. Everything I know I learned in the 9th grade from one of those old lady school teachers who was a tyrant on a mission. However, I took enough literature in college for my dad to say, “Don’t major in English too. You’re already majoring in useless subjects.” The truth is though that I never liked highbrow literature like James Joyce or even Faulkner at his peak. I confess an appreciation for William Blake, and had an old school English professor who dismissed the term paper I wrote on his simple stuff and ordered me to write one on “Heaven Hell,” which to this day I’m not sure I understand. (Nowadays a student could appeal a professor’s decision like this and insist upon a passing grade for having done the assignment, but in those days a professor could actually order a student to work up to his potential.)

            Anyway, I personally wonder how much slack I should cut people who don’t have my background. I cut Latinos a lot of slack in text messages, when they write “ala” for “a la” and even “callo” for “cayo.” Oral communication is the gold standard, and there’s no reason why I should expect others to have the same chops that experience and education have provided to me. Yet, on the flip side, I do have to wonder how a grown up can have been successful in business or whatever and still write things like “wear where u, i want to the ofice.” You’d think there would be some general stock of cultural competence, at least among the successful, but noooo.

            One thing I notice is capitalization. It seems like people want to capitalize words they believe are important, like government, even when they shouldn’t be. You capitalize high school. Oops, a mistake. A specific high school should be capitalized, since that would be a proper noun, but “high school” in general shouldn’t be.

            It’s a more or less affair, I think, and none of us are error-free, but then again a little more than less would be nice.

            Meanwhile, people make similar mistakes with arithmetic all the time, but that’s another subject . . .

            BTW, you write well.

  • Chris Thomas

    I hope more business go down and more people loose their jobs and maybe the Ticos will rise and go after the politicians and kill a few but that will never happen because they love to take it up the a__

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