Uruguayan families reduced their short-term economic expectations by 4.9%, in a context of slowdown in spending that could have an impact on private consumption, as reported by Equipo Consultores in its latest survey, which collated indicators of trade, income and employment, among others.
Regarding the aggregate indices of family expectations, there was a setback in the May measurement, which reached 36.6%, against 41.5% it had achieved during the second half of last year. According to the director of Economic Consulting at Equipo Consultores, Alexander Cavallo, One of the aspects that explains this situation is the impact of the drought, which transcended the agricultural sector.
Analyzing the data, the study showed that there was a drop in household spending that in 2022 it had a growth of 6%, which in any case slowed down in the final stretch of the year, when it grew 4.5%, contrasting with the 7.3% of the previous quarter.
The Cavallo report considered that “the fundamentals of household spending appeared, at the beginning of the year, favorable for 2023”, something to which he added the possibility of a recovery of the wage bill and the weak exchange rate, which supports “some continuity in wage increases in dollars.”
The increase in sales that could not be capitalized
With respect to the 1.7% year-on-year increase in real sales in the first quarter, which reflected the good records of incoming tourism observed in the same period, there was no strong or widespread boost in commercial activity. This occurred “partly because the increase in demand from non-residents was offset by consumption in neighboring countries. analyzed the member of the Consulting Team.
He even maintained that “some deterioration of the leading indicators” was seen and graphed that the expected diffusion rate of sales it fell from 41% in the first quarter to 36% for the second. Additionally, a lower propensity of companies to hire, purchase inputs or invest was once again observed, falling from 57% in the measurement of the third quarter of 2022 to 52% in the last measurement, which shows some lower activity expected for the coming months.
On the other hand, the Consulting Team Index which measures how confident workers feel about keeping their employment continued at low levels, while demand indicators retail (attention to prices, loyalty to brands, etc.) continue at very restrictive levels, in some cases in the worst records in almost 10 years, Cavallo admitted.
For all this, he concluded that “the recent evolution of the leading indicators shows a certain deterioration in the perspectives, both on the supply and demand sides.” In any case, he predicted that it is probable that the wage bill will continue to recover in the coming months, supporting the growth of private consumption, which will continue to be the engine of aggregate demand this year, although “with less vigor than what we expected a few quarters ago.” ”.