Our network, Grant Thornton International, has released the latest results of the International Business Report (IBR), the leading global survey of the mid-market that sheds light on organizational health and the challenges affecting business.
Since 1992, the IBR has surveyed around 8,000 senior mid-market executives. This report provides data on companies' perceptions of overall economic optimism, salaries, factors that will drive companies and those that will limit their growth over the next 12 months.
Globally, 2024 was marked by a slowdown in inflation in most markets. There were also interest rate cuts by Central Banks, increased consumption and uncertainty caused by geopolitical conflicts and commercial decisions by major players in the global market. Despite this context, optimism grew 10 percentage points (pp) since the first quarter of 2024, establishing a new historical high of 76%.
In Argentina, mid-market optimism increased by 7% from the first quarter of 2024 (67%) and grew by 50% compared to the second half of 2023 (48%), reaching 72%. The decreased perception of constraints to business growth is the main driver of this level of business optimism, above growth expectations.
The percentage of executives who identify the expected future shortage of orders/demand as a limitation decreased by 73% in the last quarter of 2024, to 9% (-25pp). In the second quarter of the year, it had been identified by 59% of respondents. The identification of supply chains and complex procurement systems as a key constraint also had a sharp decline (-44%), as did geopolitical disruption (-47%) and availability and cost of raw materials and other inputs for production processes (-30%).
Growth expectations are marked by slight declines of up to 9 percentage points compared to the third quarter of 2024. This is the case of business leaders who expect an increase in selling prices in the next 12 months: less than half of respondents (49%) responded favourably, 15.5% less compared to the previous quarter (-9pp).
Other growth indicators that have declined include expectations of an increase in exports (-5pp to 20%), employment (-3pp to 39%), revenue from non-domestic markets (-4pp to 15%), number of countries to sell to (-1pp to 15%), ratio of employees focused on non-domestic markets (-5pp to 11%) and use of non-domestic suppliers and outsourcers (8%, -5pp).
“The low expectation of an increase in exports in the coming months is not only one of the lowest in the region, but - if it happens - it would compromise the inflow of foreign currency and consequently investment and expansion intentions,” says Natalia Avallone, Director of the International Business Centre of Grant Thornton Argentina.
“These declines in expectations related to foreign markets are possibly influenced by the prospects of a slowdown in trade after a strong 2024 and uncertainty about the impact that the Trump administration will have on companies outside the United States,” Avallone adds. "However, it should be noted that 65% of business leaders in the Argentine mid-market have an expectation of increased income and 45%, in profitability. Representing a growth of 9 percentage points in each compared to the third quarter of 2024.”
Unlike the growth in investment intentions of the global mid-market, Argentina only registered an increase in investments related to plants and machinery, with 43% of the leaders surveyed expressing their desire in this area (+8pp).
The rest of the indices followed the global trend: Expectations of increased investment in new facilities in the next 12 months fell 3pp to 29%, investment in brand fell to 25% (-7pp), staff skills to 37% (-3pp), research and development to 32% (-3pp) and the intention to increase investment in sustainable initiatives fell 18% to 28% (-6pp). Investment in technology remained at 49%, as was the case globally, where it remained at 69%.
Starting in the second half of 2023, in addition to the questions asked to all respondents in more than 150 economies, the IBR includes three specific questions for Argentine executives. They refer to issues specific to our context:
61% say that the inflation rate has the greatest impact. This represents a decrease of 1 percentage point compared to the previous quarter (62%) and 12.86% compared to the last half of 2023 (70%). In second place is the monetary exchange rate, with 15% (-1pp), followed by financial interest (11%, -2pp). The own profit margin target had an exponential growth in its impact, increasing by 200% and influencing the decision-making of 9% of the executives surveyed.
33% rely on the commercial success of the company (+9pp), while 25% do so on the value of the collective and the know-how of the collaborators (-11pp). The expertise and know-how of leaders is a resource used by 21% (+4pp) and the financial stability of the firm in times of uncertainty, by 20% (-3pp).
54% of leaders offer training and professional development (+1pp), 31% indicate they offer salaries above market rates (30% less than in the third quarter of 2024). Improving health and mental health programs and offering monetary rewards linked to employee performance are implemented by 29% of the leaders surveyed, representing an increase of 13pp and 7pp respectively. The offer of extra leave or free time saw a 33% growth in the last quarter of 2024, reaching 16%; while employee benefit programs stopped being used as an attraction and retention strategy by half, with only 12% currently using them (-52%).
“Argentina’s projections for 2025 are largely influenced by the expectation that there will be less trade restrictions,” Avallone points out. “However, it is possible that trade measures and the various tariff scenarios from Argentina’s main trading partners, such as the United States, could influence the future outlook.”
Download the Argentina report to learn more about our findings:
