Businesses, consumers optimistic about finances, economy
In a ringing endorsement of government policies, businesses and consumers remained optimistic about their finances
and the economy in the latest confidence surveys.
Following a surge in both indices during the first three months of 2015, consumer confidence remained largely unchanged in the second quarter of the year, while business
confidence fell just marginally.
"For the last nine months, the average (business) confidence level has been better than any other time during the last 10 years," said Don Anderson, who led the latest survey of confidence indices conducted on behalf of the Jamaica Chamber of Commerce Conference Board.
"Economic confidence (among consumers) was higher during the first half of 2015 than any comparable time since the
second half of 2012," he added.
The business confidence index was 128.2 in the latest survey compared with 131.9 in the previous quarter, and well above the 112.8 recorded in the second quarter of last year. The consumer confidence index stood at 114, or slightly down from the 114.3 recorded in the first quarter of 2015 and higher than the 100.8 recorded a year earlier.
Consumers were still quite dissatisfied with the current economic situation. Eighty-six per cent still see jobs as being scarce, personal incomes are expected to remain the same, and purchase plans were largely unchanged.
However, householders held the most favourable expectations of the economy since the closing of 2012 - 27 per cent expected the economy to worsen and 34 per cent expected the economy to improve. Also, although just 13 per cent of consumers reported that jobs were plentiful, their perception of the current job situation was the most positive since 2008.
"Low inflation as well as the relatively better economic performance of Jamaica's main trading partners will help to ease the adjustments in the domestic economy," said Anderson. "Jamaican consumers seem to have recognised that the long-term benefits outweigh the harsh but more temporary costs of
current economic policies."
Although, optimism among Jamaican firms eased following the surge recorded in the first quarter of 2015, it still remained at the third highest level ever recorded.
"The small decline does not represent a significant departure from the otherwise record levels of
business confidence," said the renowned pollster at a press briefing held in New Kingston on Tuesday. "The stabilisation of confidence at these very favourable levels was equally driven by firms' assessment of current and future economic conditions."
Firms have expressed more optimism during the past nine months than during any comparable time period in the past decade.
Among them, financial pros-pects remain strong as 64 per cent of all firms expected their financial health to improve during the year ahead. Although that proportion was down from the all-time record of 74 per cent recorded in the first quarter of 2015, it was above the 62 per cent recorded in the second quarter of 2014.
Also, 68 per cent of firms reported that profits were higher or the same as they previously anticipated, while 62 per cent believe that their profits will improve over the next 12 months.
Consequently, investment plans remained at record high levels - 62 per cent reported that it was a good time to expand their productive capacity to more fully take advantage of future economy opportunities. This was only slightly below the all-time record of 65 per cent set in the last quarter of 2014.