Date: April 9, 2018
Survey of Business & Consumer Confidence Index
The Jamaica Chamber of Commerce announced the results of the 2019 1st Quarter Business and Consumer Confidence Indices at the JCC Secretariat. The presentation was led by Mr. Andre Gooden, followed by Mr. Don Anderson, Managing Director at Market Research Services Ltd whom presented on the findings.
Business Confidence Index
According to the Survey of Business Confidence First Quarter 2019 Summary Report, The Business Confidence index increased to 151.3 points, up from 147.5 points recorded in Q4 2018 unlike that in Q1 2018 which reported a dip in confidence.
Firms are of the idea that economic growth increased but not significantly, with 67% of these businesses reporting that this will occur over the next year, as compared to Q4’s 65%. This is not a major change when compared to the proportion that was reported in Q4 2018 but it has been highlighted as the highest in the history of these surveys. This has resulted in a jump of the index to an 157 points, the highest ever recorded.
The view of investment plans by firms have soared as their willingness to invest in new plant and equipment has seen its highest in the history of survey. This moved up to 159 points surpassing the 151 points recorded in the last quarter of 2018. Approximately over 70% of firms surveyed still agreed that the timing was right for expansion. In addition, 56% of the firms had concrete plans in place to increase the level of capital investment over the next year. Notably, crime and its associated costs continues to be the main barrier in facilitating expansion in Q1 2019.
Despite the increased optimism, firms are not as optimistic about financial gains and profits with 74% expecting gains within the upcoming year, down from 78%. There was also a reduction in the percentage of firm anticipating improvements in profitability of the firm which amounted to 69%, down from 71%. According to Mr. Anderson, “majority of the businesses remained confident in the internal strategies and plans that will be stablished in the year to come.”
The survey showed that the fraction of firms with profits exceeding expectations was 19% in the 1st quarter of 2019, relative to 14% of last quarter 2018. Based on the firms interviewed, 62% expected profits while the proportion that reported unfavourable profits stood at 19%.
Firms expected that the Government of Jamaica would not announce any changes in the taxes within its budget for the next fiscal year as indicted by 47% of firms interviewed. Furthermore, one third of businesses were not as optimistic and forecasted that there would be an increase while 20% expected a decline.
Consumer Confidence Index
This optimism continued on its upward trajectory as consumer confidence strengthened in the 1st quarter 2019. The consumer index was 177.5 points for the 1st quarter of 2019 relative to that of 175.5 points for the 4th quarter of 2018 reflecting a new record in this index. The anticipation for and the observations of job creation have driven this confidence (30%). This has also been expressed by their views of Government plans (21%) and infrastructural changes (21%).
Notwithstanding, the increase in the consumers’ confidence, the expectations for income gains remained unchanged, anticipated by the same 50% in the 1st quarter. Notably, 36% of these consumers received remittances, where year-to date, the average percentage receipt of remittances stood at 36%.
The views of consumers relating to current growth in economic conditions remained slightly stable with an index of 208.3 points for the 1st quarter of 2018 (Q4: 2018: 209.7 points). Their expectations for the future increased by marginally to 167.2 points from 164.2 points.
Assessment of the current business conditions by consumers were stable at 110 points in the 1st quarter 2019. Since Q1 this has been a continued upward movement but has remained the same over the last two quarters. The proportion of consumers who assessed business conditions as being good grew to 24% compared to 25% last quarter. However the incidence of anticipation for further improvement remained at 41% of consumers which will translated in an increase the Index of Expected Business Conditions to 128 points in Q1.
For the 1st quarter of 2019, the current job index contracted marginally to 54 points, the first time in the last nine quarters. Job outlook also slid by 1 point from 123 to 122 for the first time in four quarters
Consumers do not appear to be purchasing either a home, car and to take a vacation in the year ahead. Among those who will do so, are those most likely to take a vacation (36%), a slight decline when compared to last quarter’s 38%. Most of the consumers who will take a vacation, 64% indicated to travel overseas with 97% intending to use their personal savings for financing such plans.
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