Monday 16 July, 2018

Business and consumer confidence at sustained levels

However, businesses say the crime rates are impacting their optimism, according to Don Anderson, managing director of Market Research Services, the company responsible for conducting the survey.

However, businesses say the crime rates are impacting their optimism, according to Don Anderson, managing director of Market Research Services, the company responsible for conducting the survey.

The second quarter 2018 data of the Survey of Business and Consumer Confidence continues to highlight a sustained period of confidence amongst both groups, with an average of 150 points. This represents he highest recorded since the start of the survey in the second quarter of 2001.

This was revealed on Tuesday during the release of the 2018 Second Quarter’s Business and Consumer Confidence Indices at the Jamaica Chamber of Commerce Secretariat in Kingston.

Business confidence index increased to 140.4 points in the second quarter of 2018, nudging closer to its peak of 144.6 points in the first quarter of 2016. Meanwhile, consumer confidence index was 159.1 points compared to 156.4 points in the first quarter.

However, businesses say the crime rates are impacting their optimism, according to Don Anderson, managing director of Market Research Services, the company responsible for conducting the survey.

 “One cannot ignore the consistent concern that businesses express with regard to what they see as the debilitating effect of crime, even if they themselves have not been personally affected, Anderson said.

Notwithstanding, expectations for economic growth continue with indices of 132 and 153 points among businesses and consumers respectively, each representing an upward movement.

Consumers are convinced by the government’s initiatives and plans. Firms, in addition to ‘just remaining optimistic’ are equally convinced that the economy is moving in the right direction.

On the other hand, while both firms and consumers believe the economy is in good shape, with job prospects, neither are seeing these positive realities reflected in their lives and businesses.

“At first glance, this may seem somewhat contradictory, but as we from the consumer confidence data, there is a consistent pattern between the two,” said Anderson.

The Survey of Consumer and Business Confidence is published by the Jamaica Conference Board, an affiliate of the Jamaica Chamber of Commerce.

“It is clear that consumers have positive view of the economy and the direction it appears to be taking and future job prospects. It is nonetheless important to note that whilst they feel that there is growth in the economy, they do not feel this trickling down to them,” Anderson said.

Anderson, however, pointed out that “when we talk about improvements in job prospects, we are not saying that consumers believe that jobs are going to become available, but that fewer think negatively about the situation.”

Consumers are also skeptical about their income increases and are concerned about the level of unemployment.

“They are very circumspect with regard to their buying intention for things such as a car, a home or vacation,” Anderson said.

According to the survey results, the trend in future purchase plans remained unchanged with consumers more optimistic about taking a vacation (29 per cent) than they were about buying a car (13 per cent) or a home (7 per cent). But the proportion of consumers who anticipated making a purchase declined for each item.

Despite their optimism about business conditions and the economy, consumers did not anticipate a change in their personal finance.

As for the profitability of their businesses, the proportion of firms with profits exceeding expectations was 18 per cent in the second quarter of 2018, representing no meaningful change from the 17 per cent recorded in the first quarter.

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