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Latin American SMEs Optimistic About 2011

Miami, November 23, 2010

Annual UPS survey reveals that SMEs anticipate their company's financial situation will improve in the next year

The UPS Business Monitor Latin America (BMLA) study, now in its fourth edition, reveals that small and medium enterprises (SMEs) throughout Latin America are finally seeing signs of recovery for the first time since 2008. The study shows that almost 80 percent of the SMEs surveyed project an economic improvement for their companies over the course of the next 12 months - and they are planning accordingly. Despite not yet returning to pre-crisis business performance levels, SMEs confirmed a considerable decrease in workforce reductions and ranked marketing and sales as their top investment priority in 2011, in addition to citing supply chain management as a strategy for increased competitiveness.

"The findings from the latest BMLA study are very motivating considering that economic conditions for Latin American SMEs are improving, and they are seeing growth opportunities ahead," said Romaine Seguin, UPS Americas President. "SMEs are stabilizing their workforce and are ready to invest in strategies that will help them capitalize on the momentum carrying into 2011. The BMLA is a resource provided to businesses of all sizes to help keep them informed of opportunities and trends occurring throughout their region as they develop business strategies to grow their bottom line."

Since 2006, UPS conducted the BMLA survey among SME business leaders to gather insight into the latest opinions, attitudes and practices of SME decision makers throughout the region. The 2010 edition of the BMLA is comprised of more than 800 surveyed SMEs across 7 countries throughout the region: Argentina, Brazil, Chile, Colombia, Costa Rica, Dominican Republic and Mexico.

Economic Growth and Climate

SME outlook on 2011 is stronger, with 79 percent of SMEs surveyed confirming a positive outlook compared to 47 percent in 2008. Among the respondents, SME business leaders in Chile (90 percent), followed by Brazil (82 percent) and Colombia (81 percent) rated 2011's potential for business growth highest. Nevertheless, the SMEs surveyed have not yet returned to the same level of business performance prior to the 2008 crisis. The study attributes the positive outlook towards 2011 in large part to this year's strong business results and shows that more than half (54 percent) of the companies surveyed experienced an improved business year in 2010.

In line with the positive outlook reported by the BMLA, almost half (46 percent) of SMEs stated that they plan to increase their workforce size over the next twelve months, while the amount of SMEs planning workforce reductions dropped from 30 percent in 2008 to only 4 percent in 2010, confirming the stabilized economic conditions in the region.

Globalization is Good for Business

As stated in a report published by ECLAC for 2009-2010, international trade has played a vital role in the recovery of the global economy, with trade and open markets helping to prevent the crisis from deepening and successfully transmitting signals of rising demand. The SMEs surveyed for the BMLA confirmed this sentiment by stating that they see globalization as being good for their business, with nearly 6 out of every 10 SMEs surveyed (54 percent) currently engaged in international trade or planning to be in the near future.

Considering that supply chain management is viewed as underlying enabler of international trade, a third (34 percent) of SMEs stated that this business component is vital for increasing competitiveness, citing how trade allows a company to expand its business model and increase earnings in addition to helping to reduce costs.

While SMEs acknowledge the importance of trade as a competitive strategy, SMEs currently not engaged in exporting and/or importing activities are still facing barriers to international markets, citing difficulty in finding foreign business partners (28%) and gaining access to capital (25%) to as the primary obstacles impeding progress. Other obstacles mentioned were customs processes, transparency and visibility of the supply chain, and cultural differences.

"As the world's largest package delivery and supply chain services company, UPS is well positioned to strengthen trade within and between Latin America and the U.S., Europe and Asia through its integrated global network," Seguin said. "UPS combines a century of experience, deep industry insights, and local customs knowledge to help any business solve today - and tomorrow's - logistics challenges."

Notes to editors:

  • The 2010 Business Monitor Latin America (BMLA) is a barometer of opinions, attitudes and practices of Latin America's small- and medium- sized enterprises (SMEs) decision-makers conducted from September through October 2010.
  • The BMLA is a study commissioned by UPS and facilitated by the leading market research group, TNS Gallup, in the following countries: Argentina, Brazil, Chile, Colombia, Costa Rica, Dominican Republic, and Mexico.
  • For its fourth edition, the BMLA interviewed 810 top-level SME executives/business leaders with decision-making power across various industries.
  • SMEs are defined as any company with 250 employees or less, while the executives interviewed are those responsible for strategic decisions that have a direct impact on the future course of the company.
  • Figures may total less than 100% where only partial data are used or more than 100% where more than one response was allowed.
  • The results of the BMLA survey provide UPS, its customers, and business leaders information on emerging issues and trends predicted to influence businesses in the region as they operate in the global marketplace.

More Information

About the UPS Business Monitor IV
The UPS Business Monitor began four years ago in Latin America as an important information resource to help UPS customers stay ahead of ever-changing business trends. Similar editions are commissioned every year in Asia, Canada and the U.S. Each UPS Business Monitor offers a glimpse into the psyches of business decision-makers who are shaping the world of global commerce every day.

For complete results of the UPS Business Monitor Latin America, visit the UPS Pressroom.

About UPS
UPS (NYSE:UPS) is the world's largest package delivery company and a global leader in supply chain and freight services. With more than a century of experience in transportation and logistics, UPS is a leading global trade expert equipped with a broad portfolio of solutions. Headquartered in Atlanta, Ga., UPS serves more than 220 countries and territories worldwide. The company can be found on the Web at UPS.com and its corporate blog can be found at www.blog.ups.com. To get UPS news direct, visit pressroom.ups.com/RSS.

To ask about this press release, contact:

Porter Novelli

954-727-8438

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