Date: October 9, 2018
Survey of Business & Consumer Confidence Index
The Jamaica Chamber of Commerce announced the results today, October 9, 2018, the 3rd Quarter Business and Consumer Confidence Indices at the JCC Secretariat. The presentation was hosted by Mr. Don Anderson – Managing Director, Market Research Services Ltd.
Business Confidence Index
The Business Confidence index decreased to 140.2 points, down from 140.4 points recorded in Q1 2018 and the according to the Survey of Business Confidence Third Quarter 2018 Summary Report. The index for Business Expectations of economy remained stable at 132 points and was the only factor with in which a smaller number of firms stated that improvement was expected. Sentiments on the Current Business Conditions increased to 162.2 from 161.8 in the previous quarter.
Despite a drop in the firms willingness to invest in new plant and equipment to 136 points, most (64%) believed that the time was right for expansion. In addition, 52% of firms have plans to increase the level capital investment over the next year. Crime has always been the main detriment to expansion, however the devaluation of the dollar has been of more concern as it stands to negatively affect future plans.
For the upcoming year 76% of the firms have projected gains, whilst 67% foresees that profitability will improve reflecting a +6% and +8% points respectively since the first quarter. Business’ confidence in their planned strategies continues to be the main focus of stability.
In addition, the survey showed the proportion of firms with profits exceeding expectations was 17% when compared to 18% of last quarter, a small change. Based on the firms interviewed, 58% expected profits, while the portion that reported a unfavourable profits was 25%, a decline from the 28% in the second quarter.
The question of plans regarding for Christmas highlighted that 63% of firms will indulge in plans for the festive season either for the business staff or customers, whereas the other 37% will not. The staff/employees will be the beneficiaries of these plans with about 38% of the firms intending to either host a party, social or team building activity for employees (21%) or give them bonus at Christmas.
Consumer Confidence Index
Consumer confidence continued its rise to close at 172.6 points for the 3rd quarter of 2018 relative to that of 159.1 points for the 2nd quarter of 2018. This optimism is the highest since the start of surveys of 2001 which was driven by consumers views of the current and future job situation.
As consumers’ confidence heightened so did their anticipation of income which went up by 50% in the third quarter, up from 45% of the 2nd quarter. However this was 53% in the 1st clearly indicating that consumers have lost some confidence about expecting positive impacts from the businesses that were seen in Q2. Notably, 35% of these consumers received remittances, 4% less than in Q2 2018, while year-to date, the average percentage receipt of remittances is now 36%, the same as the 2017- year average.
The views of consumers relating to current growth in economic conditions grew by almost 36 points since the 1st quarter of 2018. Their expectations for the future increased by 9 points. An improved year ahead outlook for the economy was expected for the future was expected by 37% in the third quarter of 2018. The positive views of consumers were due to their perceptions of jobs being created (23%) and trusts in the initiatives and plans of the Government (22%).
Assessment of the current business conditions by consumers increased from 99 points in the 2nd quarter to 106 points of the 3rd. The proportion of consumers who assessed business conditions as being good grew to 22% which translated in the large majority of 84%, who had a positive impression of business conditions with 62% considering it to be stable or average. In addition, further improvement is being anticipated by 39% of consumers which will translate in an increase in the Index of Expected Business Conditions by 10 points.
There are great hopes for jobs as 10% up from 7% in the second quarter had the view that jobs will be abundant while 41%, up from the 37%, expected job situations to improve over the next year. This resulted in the increase in the indices of the current job situation and expected jobs by 13 and 8 points. Positive job outlook was due to the observations of persons being employed and/or reports of job creation (26%).
Consequently consumers appear to be more certain of their potential to purchase a home, car and to take a vacation in the next 12 months as shown in the third quarter results. Expectations that they will be able to take a vacation reported the largest grown by 11 points from 29% to 40%. the consumers who expected to purchase a car had an increase from 13% in Q2 to 29% in Q3 while the purchase of a home marginally moved up from 7% to 9%.
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