Only 25% of Uruguayan Executives Expect Higher Profits: What It Means for Investors

The Profit Signal Just Turned Sharply Cautious

Only 25% of Uruguayan executives expect their company’s profitability to rise over the next twelve months, the lowest forward-looking result since 2020. The survey, conducted by consultancy Exante between September 29 and October 30 and published by El Observador, covered 341 executives at large and mid-sized firms.

Just 47% now rate performance of the past year as good or very good. That is down from 56% in April 2026 and 69% in October 2024.

What the Margin Data Actually Shows

Exante’s latest reading separates how executives view recent performance, future profits, and the specific costs that block them.

A weaker profitability snapshot

According to the Exante survey published by El Observador, 41% call profitability good and only 6% call it very good. Another 40% describe it as average, while 13% say it is bad or very bad.

The negative trend is not new. Positive assessments stood at 65% in April 2025 and have fallen steadily since then. Looking forward, 58% expect no change in profitability, up from 53% in the previous survey. The 17% share expecting a decline is an improvement from 22% last time, so the main story is not panic — it is flat expectations.

Salary costs and the competitiveness gap

Even as two-thirds of executives rate their own competitiveness as good or very good, 85% identify at least one concrete obstacle. The most frequently cited drags are:

• Salary costs: 67%
• Tax burden: 39%
• Labor rigidities: 34%
• Administrative burden: 29%
• Low exchange rate: 26%

The exchange rate reading is notably lower than April’s 37%, suggesting currency pressure has eased somewhat in recent months. Agribusiness and industry report the lowest positive competitiveness scores, though both remain above 50%.

Where executives see the hardest road ahead

Beyond the named drags, cost pressure sits at the top of current operational worries. The main challenges named by executives are:

• Cost pressure: 63%
• Growing competition: 59%
• Technology adoption: 42%
• Weak demand: 34%
• Human resources management: 29%
• Working capital management: 18%

Notably, the share citing growing competition rose from 52% in April to 59%, which matters for investors trying to gauge margin durability.

Team Haverkate’s Read: Why Thin Margins Hit Uruguay’s Real Economy

From our side of the table, this survey matters because corporate profitability eventually becomes landlord income, tenant demand, and job creation. Flat profit expectations do not automatically mean falling property values, but they do change how we underwrite new purchases.

Economist Pablo Roselli has made the point clearly in recent commentary: Uruguay needs companies to earn more to break out of stagnation. More than 40% of firms now report average or poor profitability, and international comparisons put the country’s return on capital in the weakest third. That is not a detail — it is a structural warning for any investment that depends on local business spending.

A separate CEIC data series adds a useful cross-check. Uruguay’s business confidence growth printed at minus 10.7 percentage points in May 2026, a broader confidence-growth measure that had already turned negative earlier in the year. It is not the same question as Exante’s profitability outlook, but the two signals point in the same direction.

The tension we see is important: executives still believe their own firms are competitive, but they do not expect that competitiveness to show up in profit. That tells us the system around them — labor costs, taxes, regulation — is absorbing the upside. For foreign investors, that is an argument for focusing on assets with pricing power and hard local demand, not on paper projections of rapid earnings growth.

Roselli has also warned that proposals like a shorter working week assume companies can give up profit without cutting jobs. The Exante data suggests the margin cushion for that assumption is thin.

A Harder Test for the 2027 Investment Case

Uruguay’s core pitch to international capital has long been institutional stability. What this survey adds is a reminder that stability alone is not the same as earnings momentum. The next few quarters will test whether a competitive private sector can convert stability into profit.

For real estate investors, the practical question is how flat corporate expectations flow into lease renewals, commercial vacancies, and the pace of corporate expansion. The market is not breaking — it is being repriced around a slower, more selective local economy.

There is one risk on the buying side worth flagging in a slower margin environment: dual agency. This arrangement, where the same agent represents both buyer and seller, creates a built-in conflict of interest. The agent cannot push the seller for the lowest acceptable price while also advising the buyer to hold firm. For an international purchaser, the result can be an inflated valuation, undisclosed carrying costs, or a negotiation that never reveals the seller’s real bottom line.

Team Haverkate helps international buyers and investors read these signals through local due diligence rather than listing-level optimism. We track how corporate earnings, cost pressures, and policy debates affect Uruguay’s property market, and we maintain close relationships with vetted local tax and legal specialists for anyone structuring a cross-border entry.