Date: July 10,2018 

Today, The Jamaica Chamber of Commerce announced the results of the 2018 2^nd Quarter Business and Consumer Confidence Indices today at the JCC Secretariat. The presentation was led by Mr. Don Anderson – Managing Director, Market Research Services Ltd.

Business Confidence Index

 According to the Survey of Business Confidence Second Quarter 2018 Summary Report, The Business Confidence index increased to 140.4 points, up from 136.5 points recorded in Q1 2018 and the 5^th highest since surveys started in 2001. The main drivers for such growth lies within the expectations for economic growth, as this index increased from 125.8 points to 132.0 points.

Firms are of the view that the economy is moving in the right direction and this has convinced them of future growth. In fact, the proportion of firms that expected an improved economy increased by 16% points from 48% in the 1^st quarter to 64% in the 2^nd quarter, 10% points higher than the average in 2017.

This increased optimism about future economic prospects has translated to firms expecting stability in their future business conditions. When asked to assess their firm’s financial prospects, 70% expected gains in the year ahead while 65% expected improvements in the profitability of their firm. This represents a change of 0% and +6% points respectively since the 1^st quarter.

Thus far, survey suggested that the proportion of firms with profits exceeding expectations was 18% in the 2^nd quarter, relatively flat from the 17% recorded in 1^st quarter. Also, just over half of the firms surveyed (55%) reported that their 2018 goals are on the way to being realized but not fully on target or as planned. Just less that three in every ten firms surveyed, 28% were fully on target with the goals set for 2018.

However, when asked about the firm’s willingness to invest in new plant and equipment, this dipped marginally to 137 points down from 140 points in 1^st quarter of 2018. However the large majority, 65%, continued to agree that the time was right for expansion, exceeding the 58% average in the year 2017. Crime and its associated cost were cited as the number one risk factor to business investment.

Consumer Confidence Index

This optimism continued on its upward trajectory, as Consumer confidence also increased for the 2^nd quarter of 2018. The Consumer Confidence index was 159.1 points for the 2^nd quarter compared to the 156.4 points in the 1^st quarter, as consumers’ optimism increased about current and future business conditions.

Though consumers’ confidence in business and job prospects increased, they were however not as confident that such benefits will be trickled down to them. This was evident in income expectations declining. Income gains were anticipated by 45% in the 2^nd quarter, down from 53% in the 1^st quarter of 2018.  Notably, 39% of these consumers received remittances, where year-to date, the average percentage receipt of remittances started an upward climb from 36% in 2017 to 37% so far in 2018.

Consumers’ optimism was also observed in their assessments of current economic conditions, as this index grew by 9 points to 179.5 points up from 170.8 points reported in the 1^st quarter in 2018. Their expectations for the future however remained unchanged at 152 points, as improved year-ahead outlook for the economy was expected by 33%, a marginal improvement from 31% reported in the 1^st quarter. Consumers with positive views of the economy remained optimistic and confidence in the Government’s efforts and their perceptions of the current and/or future availability of jobs.

It is however important to note that though jobs are perceived to become available in the future by consumers (37%), this is relatively at a low level, indicating the general population does not share this believe. In fact, the percentage of consumers who expected a worsening of the economy was 33%, creating a balance between optimism and pessimism.

However, despite consumers’ optimism about current business and economic conditions, they did not anticipate a change in their finances.

The information contained herein has been obtained from sources believed to be reliable, however its accuracy and completeness cannot be guaranteed. You are hereby notified that any disclosure, copying, distribution or taking any Action in reliance on the contents of this information is strictly prohibited and may be unlawful. Mayberry may effect transactions or have positions in securities mentioned herein. In addition, employees of Mayberry may have positions and effect transactions in the securities mentioned herein