'Crime could eat away at business confidence'
“We note the figures are above 60 since the start of the year and that is alarming,” said Anderson.
Firms are more optimistic about the prospects of their businesses and the economy in general, with business confidence in the last quarter of 2017 the second highest ever recorded since the start of the Business and Consumer Confidence Surveys in 2001.
But rising crime is expected to impact the positive outlook in the coming months, according to Don Anderson, Managing Director of Market Research Services, the publisher of the Jamaica Chamber of Commerce-commissioned surveys.
“We note the figures are above 60 since the start of the year and that is alarming,” said Anderson. “They (businesses) are therefore making the point quite clearly that the biggest drawback to the realization of all that they are looking forward to is the level of crime.”
Anderson said, following the introduction of the Zones of Special Operations last year, there was a level of optimism among businesses, with the perceived impact of crime falling by about five percentage points.
“So there was a beginning of a sentiment that suggested that the crime measures were likely to make a difference in the whole outlook on the future,” he said.
Now, with the incidence of crime – with more than 60 murders recorded - over the first three weeks of this year, Anderson said one is left to speculate, but the data from the first quarter of 2018 will indicate the level of the impact on local businesses.
For the time being, according to Anderson: “Businesses are very optimistic, not just for their organizations, but expect profitability to be strong.”
The business confidence index stood at 142.6 in the three months ended December 2017, just marginally below the 144.6 in the first quarter of 2016 – the all-time peak. This is also marginally higher than the index of the fourth quarter suggesting similarities in the last quarter of both 2016 and 2017.
Apart from their natural optimism as business owners, confidence in the economy is largely due to their conviction that the economic indicators are moving in the right direction as well as confidence in the strategies put in place to tackle crime
Anderson, who presented the survey at the JCC Secretariat on Half-Way-Tree Road in Kingston on Tuesday, also shared businesses’ plans for the New Year.
According to the survey, 42 per cent of businesses said they intend to increase profitability; 24 per cent said they are going to look at building the organisation; 16 per cent said they are looking at improving efficiency, 13 per cent will look at building infrastructure, 13 per cent aim to introduce new products and another 11 per cent seek to improve consumer experience.
Consumer confidence on the other hand was slightly lower in the fourth quarter, with the index recorded at 148.0, slightly below the 151.1 in the third quarter of 2017.
“Fourth quarter revealed that consumers were becoming a bit more concerned about their own situation. The indices fell and there’s an indication that the consumers were concerned about all aspects that fed into the calculation of the indices,” Anderson said.
Overall, in the past eight quarters (two years), the average index has remained in the region of 149 points. While still strong, the index wavered between a low of 138.7 points to a high of 151.1 points over the last four quarters. The dip in consumers’ confidence is a result of a dip in both the Index of Current Economic Conditions and the Index of Consumer Expectations.
On the other hand, close to 30 per cent continue to believe that jobs are either adequate or plentiful. Consumers’ expectations for an improved standard of living continue to rise.
Additionally, entrepreneurship is the number one source of these expectations with 38 per cent of consumers indicating hopes for improvements because of their own efforts at identifying creative ways to improve their earning and living standards.