Friday, February 02, 2007

The good economic times trickle up 

Today is the last post on the recent economic forum at the Venezuelan-American Chamber of Commerce, VenAmCham.

So far we have seen that the economy is booming...but we already knew that.

We saw that industrial production is up 24%...opposition propoganda about the country falling apart notwithstanding.

We saw that Venezuelans are today more optomistic than ever.... but we could surmise that from Chavez's overwhelming re-election on December 3rd.

Lastly, we saw that the incomes of most Venezuelans have more than doubled in real terms over the past few years...this by itself validates what Chavez has done.

In today's slides we will see that even Venezuela's business community, supposedly under assualt if one believes the opposition, is positive about the future.

We will be looking at polling information carried out by VenAmCham of its members in late January 2007.

First we need to get some background on these companies:

The majority of those who were polled were in large companies.

And the capital for their companies comes mainly from Venezuela but with the U.S. a large second.

Now to the details of the poll. The main indicator of the business climate, or at least business peoples perception of the business climate, is their willingness to invest. That is what the poll focused on and here are the results:

A large majority of those polled will be making new investments in 2007, 61% will versus 27% who won't.

How does this compare to recent history? Last year, 2006, only 44% planned new investments and 33% did not. So clearly businesses see increased reason to invest. And why not? The economy is booming and will likely keep growing at a healthy rate. So from their point of view it would make perfect sense to invest.

Now, what about the size of the investments? Surely that counts for something:

Here we see that in 2007 the 63% of businesses planning on making larger investments than before versus 41% who are planning on smaller investments. In 2006 only 43% planned to make larger investmetns versus 39% who planned smaller investments.

Lets make sure we have this straight. Not only are more companies planning on making new investments but they are increasing the sizes of those investments.

When year hear this after hearing that the income of the poorest Venezuelan's went up by 130% in real terms you can actually start to believe in trickle up economics!!


This page is powered by Blogger. Isn't yours?