Costa Rica’s business climate still weak on hiring, investment, study finds

Based on second-quarter performance, business owners in Costa Rica are the most pessimistic they’ve been in the past three years, a recent report found.

The latest survey by the Costa Rican Chambers Union and Private Business Sector Associations (UCCAEP) shows that 51 percent of employers believe the current business climate in the country is not favorable for short-term investments.

Although most private-sector employers said they do not foresee layoffs in coming months, 65 percent said they do not plan to hire more staff, and 61 percent said they would not invest in the next six months.

The business sector perception index, which covers April, May and June, is 4.5, the same number as in 2009, a year of global economic crisis.

Costa Rican employers mostly blame distrust of the political sector, high electricity rates and recent credit restrictions imposed by the Central Bank for their pessimistic outlook, the study found.

UCCAEP has been conducting the business perception survey for 17 years, and this year’s study surveyed some 500 business owners in the Central Valley. Survey results have a margin of error of 5 percent.

Similar studies released earlier this year by consulting firm Manpower also anticipated a “modest hiring climate” for this year, with only 23 percent of employers expected to hire more workers in 2013.