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COMPANIES no longer cite crime as the major impediment to conducting business in Jamaica, but rather the tight economic environment within which they operate, according to the latest confidence surveys.
At the same time, far more consumers expect a more favourable economy and improvement to their personal financial situation, pushing consumer confidence to the highest it has been since the end of 2008.
At the same time, far more consumers expect a more favourable economy and improvement to their personal financial situation, pushing consumer confidence to the highest it has been since the end of 2008.
Yesterday, the Jamaica Chamber of Commerce (JCC) Conference Board released the confidence indices for the second quarter of 2011, which showed the index of business confidence slipping to 117.5, down from 124.5 in the previous quarter, albeit still higher than levels seen since the last quarter of 2008. Meanwhile the index of consumer confidence jumped to 116.8, up from 105.9 in the previous quarter.
Overall, Jamaican confidence for the review quarter was estimated at 117.2, up from 116.2 in the first quarter of 2011 and 108 a year earlier, and was the highest since the third quarter of 2008.
Head of the research team, Richard Curtin, attributed the slippage in business optimism to firms simply adjusting "the pace of economic growth they now expect during the year ahead".
"The small recent decline still leaves the Confidence Index near its most favourable levels recorded during the past decade," Curtin said. "More importantly, the data provide no evidence that the small recent decline is an early warning sign of a downturn in positive economic expectation."
In his presentation at the Wyndham Kingston Hotel yesterday, Curtin noted that crime and violence, which was universally cited by business firms during the past decade as the top problem facing them, in the latest survey was mentioned by just "one-in-three firms, down from eight-in-ten one year ago".
"The more ordinary economic problems facing business, and perhaps the more challenging problems, are more frequently mentioned that have to do with jobs, incomes, and prices as well as government economic policies and the impact of the global economy," he said.
Don Anderson, whose team conducted the survey across 600 individuals and 100 companies islandwide, said businesses were focused on "how they see themselves evolving given current circumstances... and their ability to meet their expenses".
In the second quarter of 2011, slightly fewer firms expected the economy to improve than in the previous quarter when expectations were at a decade peak — 47 per cent expected the economy to improve in the year ahead, just below the 55 per cent recorded one quarter ago and 52 per cent one year ago.
"The strong pace of economic growth expected in the year ahead was due to multiple factors, including more favourable government economic policies and falling interest rates as well as stronger tourism, mining, and agriculture," outlined Curtin.
Consumers also cited government policies in support of their expectations regardless of whether they anticipated an improving or worsening economy in nearly equal numbers.
"Consumers judged the current state of the economy more favourably in the second quarter of 2011 than any time since late 2008," said Curtin in his presentation. "Most of the recent gains represent the initial stage of a turnaround whereby the movement is toward the stabilisation of the economy marked by significant declines in the proportion that think the economy had worsened."
Half of all firms anticipated that their financial balance sheets will improve mainly due to rising profits and increasing demands, although for the past year and a half, profits have remained at the lowest levels in the last decade, with just 16 per cent of firms reporting that their profits in the past year were higher than they originally anticipated, while businesses have trimmed investment plans in the second quarter 2011 survey partly in recognition of slower growth prospects among Jamaican's main trading partners.
On the other hand, consumers have bumped their spending plans to near-two-year highs, with vacation plans voiced by 36 per cent of households, vehicle buying plans held by 23 per cent, up from 15 per cent in the last two quarters, and home-buying plans up from 10 per cent in the prior two quarters to 14 per cent in the review quarter.
Curtin acknowledged that changes in import duties on motor vehicles and lower mortgage rates will help boost spending but said that "buying plans seems too high to fully realise".
The proportion of households that expect rising incomes was 39 per cent in the review period, up from 31 per cent in the previous quarter and the highest level in two years.
Even then, virtually no Jamaican reported that jobs were currently plentiful — indeed, nearly all reported that jobs were scarce and hard to get in the second quarter 2011 survey.
"This extends the bleak job assessment to ten quarters, a new record. Unfortunately, consumers have not become more optimistic about future job prospects during the past year. In each survey during the past year, one-in-four expected jobs to be more plentiful. Consumers are much more likely to hold the government accountable for a downturn in jobs than in GDP," added Curtin in his assessment of consumer confidence.
Read more: http://www.jamaicaobserver.com/busin...#ixzz1RzU8hmOF
Overall, Jamaican confidence for the review quarter was estimated at 117.2, up from 116.2 in the first quarter of 2011 and 108 a year earlier, and was the highest since the third quarter of 2008.
Head of the research team, Richard Curtin, attributed the slippage in business optimism to firms simply adjusting "the pace of economic growth they now expect during the year ahead".
"The small recent decline still leaves the Confidence Index near its most favourable levels recorded during the past decade," Curtin said. "More importantly, the data provide no evidence that the small recent decline is an early warning sign of a downturn in positive economic expectation."
In his presentation at the Wyndham Kingston Hotel yesterday, Curtin noted that crime and violence, which was universally cited by business firms during the past decade as the top problem facing them, in the latest survey was mentioned by just "one-in-three firms, down from eight-in-ten one year ago".
"The more ordinary economic problems facing business, and perhaps the more challenging problems, are more frequently mentioned that have to do with jobs, incomes, and prices as well as government economic policies and the impact of the global economy," he said.
Don Anderson, whose team conducted the survey across 600 individuals and 100 companies islandwide, said businesses were focused on "how they see themselves evolving given current circumstances... and their ability to meet their expenses".
In the second quarter of 2011, slightly fewer firms expected the economy to improve than in the previous quarter when expectations were at a decade peak — 47 per cent expected the economy to improve in the year ahead, just below the 55 per cent recorded one quarter ago and 52 per cent one year ago.
"The strong pace of economic growth expected in the year ahead was due to multiple factors, including more favourable government economic policies and falling interest rates as well as stronger tourism, mining, and agriculture," outlined Curtin.
Consumers also cited government policies in support of their expectations regardless of whether they anticipated an improving or worsening economy in nearly equal numbers.
"Consumers judged the current state of the economy more favourably in the second quarter of 2011 than any time since late 2008," said Curtin in his presentation. "Most of the recent gains represent the initial stage of a turnaround whereby the movement is toward the stabilisation of the economy marked by significant declines in the proportion that think the economy had worsened."
Half of all firms anticipated that their financial balance sheets will improve mainly due to rising profits and increasing demands, although for the past year and a half, profits have remained at the lowest levels in the last decade, with just 16 per cent of firms reporting that their profits in the past year were higher than they originally anticipated, while businesses have trimmed investment plans in the second quarter 2011 survey partly in recognition of slower growth prospects among Jamaican's main trading partners.
On the other hand, consumers have bumped their spending plans to near-two-year highs, with vacation plans voiced by 36 per cent of households, vehicle buying plans held by 23 per cent, up from 15 per cent in the last two quarters, and home-buying plans up from 10 per cent in the prior two quarters to 14 per cent in the review quarter.
Curtin acknowledged that changes in import duties on motor vehicles and lower mortgage rates will help boost spending but said that "buying plans seems too high to fully realise".
The proportion of households that expect rising incomes was 39 per cent in the review period, up from 31 per cent in the previous quarter and the highest level in two years.
Even then, virtually no Jamaican reported that jobs were currently plentiful — indeed, nearly all reported that jobs were scarce and hard to get in the second quarter 2011 survey.
"This extends the bleak job assessment to ten quarters, a new record. Unfortunately, consumers have not become more optimistic about future job prospects during the past year. In each survey during the past year, one-in-four expected jobs to be more plentiful. Consumers are much more likely to hold the government accountable for a downturn in jobs than in GDP," added Curtin in his assessment of consumer confidence.
Read more: http://www.jamaicaobserver.com/busin...#ixzz1RzU8hmOF