Business and consumer confidence levels more stable
Pollster Don Anderson (left) reveals the findings of the latest survey of business and consumer confidence. Also pictured is Cathrine Kennedy (right), 1st Vice President of the Jamaica chamber of Commerce.
Businesses and consumers have exhibited consistent levels of confidence over the last two years, according the latest Survey of Business and Consumer Confidence.
In particular, consumer confidence has been very buoyant for a longer period than any other time since the survey started 16 years ago.
What is more, local businesses have expressed a greater degree of economic confidence in the most recent survey than any other time prior to 2016.
“Prior to 2015, there was a very haphazard response to government policies. In those periods, prior to and after election, we saw huge peaks which we are not now seeing and we are suggesting that there is now a fair amount of stability,” Don Anderson, Managing Director of Market Research Services noted as he revealed the findings of the survey for the third quarter of 2017.
The Business Confidence Index stood at 135.2 in the third quarter of 2017, slightly below last quarter’s 137.1 and the 139.2 recorded in the comparative period last year, and 9.4 index points lower than the all-time high of 144.6 in the first quarter of 2016.
This slippage, the survey said, did not indicate a loss in confidence in the government's policies as much as an initial overestimate of the pace of the resulting economic improvement.
Meanwhile, the Consumer Confidence Index was 151.1 in the third quarter of 2017, slightly above the 149.3 in the second quarter of 2017 and nearly identical with last year’s 151.6
“Both businesses and consumers are buying into the policies being pursued and are confident going forward that they will have a means of sustaining themselves,” Anderson told guests at the Spanish Court Hotel.
Anderson outlined however that the results aren’t necessarily indicating that the groups are more comfortable, but are a reflection of the acceptance of both administration’s fiscal management policies.
“It’s a better scenario than in any other time in the last 14 years, prior to 2015 to now and it augers well for growth in the economy,” he added.
The data indicates that firms anticipate a slower, more realistic pace of growth in the economy.
The proportion of firms that expected an improved economy was 50 per cent in the third quarter, just below last quarter’s 52 per cent, the third quarter survey revealed.
Meanwhile, consumers’ perception of the current conditions in the domestic economy have remained largely unchanged at the most favourable levels recorded since 2001.
The survey also revealed that firms’ willingness to invest in new plant and equipment has remained near its all-time high since the start of 2016.
In the quarter under review, 58 per cent reported that it was a good time to expand their capacity to take advantage of future opportunities, just below the 62 per cent set in the second quarter and the start of 2016.
“Despite the small decline, there was a greater willingness to invest and participate in the expansion than any other time prior to 2015,” the survey results revealed.
Looking at consumers’ purchase plans, they were general more cautious with their spending.
“Consumers are not divorced from businesses, they are watching because that’s how they gain their living,” Anderson noted.
As it relates to consumer’s buying habits, plans to acquire homes rose to 11 per cent, slightly ahead of last quarter’s two-year low of eight per cent, but remained below last year’s 16 per cent. Vehicle buying intentions posted a small increase to 18 per cent from last quarter’s 16 per cent, although they remained below last year’s 22 per cent. Vacation intentions stood at 36 per cent compared to last quarter’s 35 per cent and last year’s 43 per cent.