Companies in Mexico and Central America see low threat of recession -survey

Enterprise leaders in Mexico and Central America say there are low expectations of a recession of their nations and are assured within the progress of their corporations.

Nonetheless, in line with the VIII KPMG CEO Outlook Survey, they acknowledge that there’s a slowdown.

Within the subsequent 12 months, solely 34% in Central America and 32% in Mexico consider there could possibly be a recession of their nations.

On a world scale, 86% of the individuals consider there can be an financial recession, though 58% anticipate it to be “slight and transient.” Subsequently, 76% really feel ready to beat its results.

Only 34% in Central America and 32% in Mexico believe there could be a recession in their countries.
Solely 34% in Central America and 32% in Mexico consider there could possibly be a recession of their nations. (Picture: web replica)

KPMG’s international survey coated 1,325 managing administrators or CEOs, all chosen with an annual turnover of not less than US$500 million. One-third of the pattern sells greater than US$10 billion.

For the regional information, KPMG interviewed 50 CEOs in Mexico and 45 CEOs in Central American nations. The analysis happened between July 12 and August 24, 2022.

Requested concerning the financial system’s confidence in their very own nations, the extent in Central America reaches 94%, nicely above the worldwide common of 85% and even above Mexico’s 80%.

“We see a better charge of confidence, notably in Central America, concerning the progress of the financial system of their nation,” stated Victor Esquivel, managing companion of KPMG in Mexico and Central America.

And what about their group’s efficiency? On this side, 84% of CEOs in Central America say they’ll develop, a degree barely beneath the worldwide common of 85% and better than 76% of these in Mexico.

“Leaders on the worldwide degree and regional leaders acknowledge a degree of confidence, however we’re additionally seeing a slowdown,” Esquivel analyzed.

In a shorter-term outlook, over the following six months, 73% of CEOs or administrators are assured within the international financial system’s resilience, up from 59% in February’s train.


How are corporations dealing with the threats of a recession? Globally, 39% have frozen hiring, and 46% are contemplating job cuts within the coming months.

However the concern just isn’t restricted to decreasing the scale of groups, however moderately the way to make them extra aggressive.

It’s why a state of affairs of competitors for expertise with the required expertise and expertise is taking form, particularly in digitalization.

Inorganic progress is rising on the horizon as a method. Twenty-six p.c anticipate to enter right into a strategic alliance, 11% a merger or acquisition, and one other 11% a three way partnership.

For KPMG, that is taking place as a result of management is starting to acknowledge the necessity to expedite steps towards digital transformation, environmental sustainability, and different associated points.

“To develop, organizations should assume exterior the field. Notably to interact in digital transformation initiatives, enhance buyer expertise and even undertake schemes to contribute or cut back the impression, for instance, environmental,” Esquivel stated.

The give attention to the primary dangers has additionally modified. In 2021, the highest spots have been cybersecurity, provide chain disruptions, and local weather change; in 2022, it’s rising know-how, operational, regulatory, and reputational dangers.

“This speaks to the speedy transformation that the market requires, the consumption patterns of consumers, and the calls for additionally of suppliers to have the ability to provide worth chains,” the KPMG regional consultant famous.

Firms are additionally projecting rising scrutiny from stakeholders. Seventy-three p.c globally, 76% in Mexico, and 77% in Central America assume that the transparency demanded by third-party stakeholders will proceed to speed up over the following three years.

Esquivel weighed that general the alternatives outweigh the challenges this 12 months. Mexico and Central America are wealthy in human expertise, with a demographic bonus and the necessity to increase training requirements.

“We usually have nice expertise on the know-how aspect,” he stated. The hot button is to attach present consumption patterns with the visualization of the long run.

“We can even be seeing new enterprise fashions seeking to remedy these issues on environmental, social, and governance points,” he commented. Amongst these, fintech has the potential to enhance social inclusion.

Is teleworking coming to an finish?

Firms with dedicated groups understand higher profitability and productiveness, rising status, stated Luis Laguerre, managing companion of KPMG in Panama.

Sixty-two p.c of CEOs in Central America, 56% in Mexico, and 65% globally anticipate all their employees to work full-time within the workplace inside the subsequent three years.

“This means that if there’s a share of organizations that may have a hybrid state of affairs or standing, and we see it within the sense that 28% of those that responded to the survey, 42% in Mexico and 29% in Central America, point out that this return to face-to-face can be in a hybrid manner,” Laguerre stated.

With data from Bloomberg