Expectations of sales growth and profitability among Argentine businessmen fell to the lowest levels of the last three years. The data comes from the traditional survey that the EY consultant performs among those attending the conventions of the Argentine Institute of Finance Executives (IAEF).

However, 55% still think that they will be able to increase their sales, 44% their profitability and 46% their investments.

“We are going through a very adverse juncture. Until August, to sustain sales levels it was necessary to sacrifice profitability. In general, it emerges from the survey that 2018 will not be a good year for the value of companies. This diagnosis, which is very influenced by what happened in the last 15 days, is not a novelty, although the survey gives us concrete data on the impact of recent changes in our economy, “said Pablo De Gregorio, EY partner.

With regard to investments, 46% of respondents stressed that they will grow and 47% will remain constant and only 7% will decrease. In turn, 52% plan to take on debt next year. On the other hand, they consider that energy, communications and the road and rail structure is the necessary infrastructure to boost investments.

When asked which measures would favor confidence when deciding on an investment, the executives highlighted a trade union-government agreement, sectoral agreements, investment protection laws and international agreements.

In relation to the administrative actions of the State that would improve competitiveness and facilitate an investment plan, the tax and administrative simplification, government-union-business agreements and the support of international credit agencies were highlighted.

The executives consulted consider that the stability of regulatory frameworks, the operation of the judiciary, fiscal stability, long-term monetary policy, external public debt and public service tariffs are the main factors that affect legal security.

Consulted on how to recreate the trust, 29% assigned a leading role to the Judicial Branch, seconded by the role of the executive branch and the unions.

“The problem is that when we move from diagnosis to action, our expectations do not materialize. In 35 years of democracy we have not managed to give us a currency and a regulatory and legal framework that are at the level of what our companies need to grow and generate value, “De Gregorio added.

“Given this environment, we see that a political system based on the consensus of the different actors in society, an adequate regulatory framework and a stable currency are the necessary pillars to build trust,” the EY partner concluded.

Only 52% of companies are thinking about taking debt, against 80% a year ago.

Regarding the sectors with the greatest growth potential, the survey identified the energy sector (35%), Agro (21%), Infrastructure (16%) and Telecommunications (11%).

With greater export potential, appear the field (38%), Energy (22%) Services (22%).

In terms of what needs to be done to improve the investment climate, respondents surprised: they identified as the main theme an agreement between governments and unions (30%), sector agreements (27%) and an investment protection law ( 2. 3%).