Business blues - Survey shows dip in confidence projection
Fewer Jamaicans think that business conditions will improve a year from now, according to the Survey of Businesses’ Inflation Expectations published by the Bank of Jamaica (BOJ).
In fact, expectations are at the second lowest level in three years.
“The out-turn for the future business conditions index mainly reflected a decrease in the proportion of respondents who believe that conditions are ‘better’,” stated the inflation report.
The decline comes amid expected rises in expenses and flattening wages.
The latest survey canvassed 326 professionals between October 21 and November 18. The results of future business expectations are at 123.6 points, or just above the three-year low of 120 points in July 2018. The latest index movement was also the lowest in 11 cycles of the report, which usually, but not always, occurs across a two-month span.
The decline in expectation comes as respondents expect higher expenses in the form of stock replacement, utilities, and fuel and transport, but lower expectations for wage and salary increases.
The index was recorded seven times in 2019 and hit a high of 153 points in March 2019, then undulated to 140.5 points in October before the steep decline by November.
The inflation survey showed that most respondents expect a relatively stable macroeconomy in which to operate businesses.
Respondents expect inflation to slightly rise for the 2019 calendar year to 4.8 per cent, which the report stated was higher than the October 2019 survey out-turn of 4.7 per cent.
“The expected inflation 12 months ahead increased to 5.0 per cent, relative to the previous survey out-turn of 4.9 per cent,” stated the report.
Respondents also expect the local currency to depreciate over the quarter, but up to date, the dollar actually appreciated. Respondents also expect the local currency to depreciate by 2.6 per cent over the quarter from the September 2019 quarter close of $136.69 to US$1. Instead, the dollar appreciated and closed the year at $129.78. The currency started 2019 at $126.90.