Cost Management Barometer 2025: Strategic application for Latin America and Central America

Illuminating opportunities from complexity to resilience

In a challenging environment characterised by persistent inflation; supply chain disruptions;
rising labour costs and geopolitical tensions; the Cost Management Barometer 2025 reveals a powerful truth: companies are not waiting for stability; they are acting boldly. And in Latin America — especially in Central America — that same spirit of action becomes even more urgent and strategic.

Key Findings Applied to the Region
1. Profitability as a guiding principle: efficiency first; growth second
93% of global leaders expect profitability gains in 2025. In Central America; where access to
financing is more limited and exchange rate volatility is frequent; growing with healthy margins is more important than
ever. Local companies are already applying models of prudent expansion and selective reinvestment; aligned with this approach of "growth with profitability."
Regional example: companies in the food and logistics sector are prioritising workflow efficiency; digitisation
of purchasing and contract renegotiation as levers for EBITDA; rather than opening new units.

2. Transformation did not stop; it just changed form
The report indicates that investment in technology; sustainability and talent remains a priority; despite
tight budgets. In Central America; we are seeing a shift towards "self-financed" investments; where process improvements
free up capital for key projects.
From ERA Group's perspective: we help clients find these internal sources of financing through
expense auditing; supplier benchmarking and inefficient contract management.

3. Cost pressure does not equal paralysis
Although 86% of global companies plan to increase prices; in LATAM that margin for manoeuvre is narrower. Consumers and B2B customers are more price sensitive. This requires a finer balance between price; perceived value and internal efficiency.
Conclusion for the region: companies must build clearer value propositions; better communicate the reasons for
price adjustments and protect margins through strategic purchasing; not by volume but by intelligence.

4. Talent management; resilient chains and agile decisions
The Barometer highlights how the priorities for 2025 are divided between talent; supply chain and cost. In countries such as Guatemala; Honduras and the Dominican Republic; where a shortage of skilled labour coexists with fragile infrastructure; operational flexibility is a strategic asset.
ERA's contribution: we support our clients in redefining relationships with suppliers; integrating
reliable local suppliers and redesigning medium-term contracts that reduce dependence on volatile players.

5. Technology and sustainability: from "nice to have" to "must-have"
In three years; global leaders see sustainability and technology as their main gaps. In Central America;
although many companies do not formally report ESG; they do face regulatory and market pressures to be more
sustainable.
Opportunity: initiatives such as sustainable procurement; emissions reduction in logistics; efficient packaging; and clean energy
are already being used as competitive differentiators. At ERA; we offer ESG assessment frameworks that can be implemented in a phased manner.

6. Tariffs and trade: local risk or advantage?
The report predicts a greater negative impact from new tariffs and trade fragmentation. But in Central America; this may translate into an opportunity for companies that operate with regional chains and local suppliers. While their global competitors face barriers; companies with local or regional operations gain agility.
ERA recommendation: for clients who export or import; reviewing CAFTA; DR-CAFTA and FTA agreements may reveal
untapped efficiencies or incentives. Tariffs cannot always be avoided; but they can be mitigated.

Strategic conclusions
• This is not a time for cuts; but for smart decisions.
--> The most successful companies in 2025 will be those that turn their cost base into a competitive advantage.
• CFOs and CEOs must move from being controllers to architects of resilience.
--> Cost control is not an accounting exercise; but a strategic one.
• The region needs to move from reactive austerity to informed investment.
--> And that starts with knowing where the leaks are; which contracts are misaligned; and which suppliers no longer add value.