Challenges such as the grim economic scenario affecting Puerto Rican companies, the heavy tax load, high energy costs, government bureaucracy, and the recent closures due to COVID-19 have local entrepreneurs convinced that recovery will not happen soon.
A survey conducted by analysis firm Estudios Técnicos Inc. confirmed that 84.7% of the entrepreneurs polled believe that Puerto Rico is in a recession and for the aforementioned reasons, 72.7% of them have no plans to expand their company operations during the first months of the new year.
Those were some of the main findings of the “Puerto Rican Entrepreneur Confidence Index” prepared by Estudios Técnicos Inc. for the Puerto Rico Chamber of Commerce. The index was based on a survey of 150 members of that trade group.
“About 54.7% of the entrepreneurs surveyed identify the economic situation as the greatest obstacle their companies face,” said José Joaquín Villamil, chairman of Estudios Técnicos.
“It’s followed by 51.3% who identify the tax burden as the main stumbling block and 37.3% highlight the problem of government bureaucracy,” said Villamil during his presentation to the Chamber of Commerce last Friday.
That list of main aspects that affect company operations in Puerto Rico also includes energy cost (36%) and restrictions due to the COVID-19 pandemic (29.3%). Other issues they mentioned are: insufficient demand for their services and products; and access to credit, among others.
Regarding the pandemic, the index revealed that 43.3% of those surveyed said their company has had to close or halt operations in the last six months. On average, these companies have had to close 100 days. About 71.3% of the people consulted assured that they have not contracted COVID-19.
It was revealing that 56% of the companies surveyed indicated that during the past six months their business sales have dropped. That said, the worst scenario is for small companies with 20 employees or less, whose sales dropped by 67%.
Regarding employment levels, 60% confirmed they have remained the same, 31% said there was a drop, and 9% said they increased the number of employees.
Regarding how they see the near future of their companies, 72.7% confirmed that they do not expect to expand their operations in the next six months. When asked how they saw Puerto Rico’s economic future during the next 12 months, 58% said they saw it the same or better — 34.7% the same and 23.3% better — while 38.7% saw a gloomy economic future.
The index was compiled based on surveys of 150 members of the Chamber of Commerce, carried out through online questionnaires from Oct. 13-30. Ninety-two percent of those companies were native Puerto Rican. On average, companies have been established for 26 years and 64% of these have between one and 19 employees.
Source: News Is My Business