MONTEVIDEO – Companies plan to cut investment by about 27 percent next year, the Uruguayan Chamber of Industries said, citing the results of a survey.
Businesses are slashing investment due to “stagnant or falling regional demand,” CIU economic adviser Sebastian Perez told EFE.
Investment is projected to fall in all industries except digital technology, where a 36 percent increase is expected, and research and development, with a 4 percent rise, the Annual Survey of Industrial Investment found.
The CIU surveyed 80 companies between July and October.
“For sure, we’ll have more reinvestment than new ventures, considering that regional demand is stagnant or even retreating,” Perez said.
In recent years, “there has been a significant investment process and, as a result, current equipment is relatively appropriate and sufficient to meet the levels of production and sales projected for what remains of 2015 and 2016,” Perez said.
The expected hike in investment in digital technology equipment responds to “the introduction of electronic billing and mobile devices, a trend that is gathering plenty of momentum in Uruguay,” Perez said.
On the international front, Uruguayan business leaders see that “Argentina is not buying Uruguayan goods at the pace one would expect,” while Argentine products are entering the Uruguayan market without restrictions, the CIU representative said.
There are problems in specific areas, like dairy products, where Uruguay faces challenges in getting its products into traditionally important markets, such as Venezuela and Russia, Perez said.
The CIU economist also pointed to differences in exchange rates between Uruguay and its competitors.