The “SME Thermometer” (*Termometro Pyme*) report, covering the first half of the year, analyzed responses from 2,116 of these business units; a common denominator among them was a context of structural instability.

A primary factor is the decline in sales, which hit its lowest level of the year so far. While this indicator stood at 41 percent in January, the contraction reached 60 percent by June, with no signs of a turnaround.

Consequently, revenue generation has become a major concern for smaller businesses, the report notes.

Rodrigo Bon, executive director of Propyme—the organization behind the study—states that this situation is not an isolated incident but rather a trend; without immediate action, there will be increased informality, more business closures, and a greater negative impact on Chilean families.

Another complex issue facing the sector is the labor market: only two of the more than 2,000 MSMEs surveyed plan to hire more workers, while 17 out of 100 intend to freeze hiring, and 11 percent acknowledge plans to cut jobs.

Compounding this is the pressure from rising operating costs, driven by fuel price hikes and other factors that are squeezing profit margins.

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