Business confidence for the third quarter of 2022 improved by 18.3 per cent, with consumer confidence also showing a positive trajectory, increasing by 4.2 percentage points.
The findings of the latest quarterly review by the Jamaica Conference Board Survey of Business and Consumer Confidence were presented by pollster Don Anderson, CEO of Market Research Services Limited, on behalf of the Jamaica Chamber of Commerce on Tuesday.
A total of 648 consumers and 110 businesses were polled.
While business confidence is still not back to the pre-pandemic level of 151.3 points reported in 2019, Anderson said the feedback from business interests showed a “significant positive outlook on the economy, their own businesses and the general business environment.”
Interestingly, 25.4 per cent of businesses surveyed expect their profits to be better than originally anticipated. This represents an increase from the 14 per cent of businesses that expressed similar sentiments in 2021 within the same period.
Comparatively, in the third quarter of 2021, 43 per cent of businesses said that they felt that profits would be worse than expected. But that number fell to 18.6 per cent for the current period, Anderson reported, describing the finding as a “dramatic reduction.”
The investment climate is also viewed far more favourably, with businesses again feeling “bullish” about investing, the survey found.
“Generally, businesses are feeling pretty buoyant about where they are and their future,” Anderson said, noting the 61 per cent of businesses that said it is a good time to invest and expand.
Of note, the finance, insurance, real estate and business services sectors will likely see investments, as 60 per cent of the firms involved in these sectors said they intend to invest over the next 12 months.
The agriculture sector ranked second, with 58.3 per cent keen on investing.
Their sentiments about the economy also improved. In the third quarter of 2021, 52 per cent of businesses felt that the economy would improve, but for this year, 55.1 per cent said they expected business conditions to improve.
Their confidence is buoyed by the belief that the pandemic is over, Anderson said.
“So, there is a positive trajectory…businesses are feeling better about the economy even though the number who felt that the economy would worsen increased marginally from 11.4 per cent to 12.7 per cent.
This is counteracted by the increase in those who said the economy is likely to be better,” he reported.
Business confidence is also premised on their faith in the government policies being put in place, the uptick in the tourism sector and the improvements in the production sector, among others.
On the downside, the high crime rate continues to be a concern for the business community, with 13 per cent of companies reporting that they expect the economy to worsen.
The continued price increases and the instability in the foreign exchange market also remain sore points.
On the consumer side, more people are confident now than they were in the second quarter of this year. In addition, more people believe the economy will get better than those who believe it will get worse.
More people also thought job availability has improved, with 35.2 per cent having a more positive outlook over the 25.6 per cent who expressed this sentiment in the comparative period of 2021.
“We are seeing a continuation of positives in the minds of the consumers,” Anderson said, noting a general optimism among consumers.
Additionally, the percentage of consumers who felt their income would improve also moved to 50 per cent for the period compared with 30.5 per cent who said this in the comparative 2021 period.
However, despite the positive outlook, there is a marginal increase in consumers’ purchase plans.
“Although consumers are more buoyant and confident about the economy they are also recognising that there are constraints that need to be applied,” Anderson said of the data analysis.
Just 29.3 per cent of those surveyed said they were likely to take a vacation. Fewer people were also keen on buying homes. That figure dropped from 10.6 per cent of respondents in Q3 of 2021 to 8.8 per cent.
Consumer outlook for the next 12 months, however, showed signs of optimism, with 34 per cent of respondents reporting that they expect the economy to be better because more businesses are opening up.
Meanwhile, the most important and largest single reason they stated; the pandemic is receding; there are signs of recovery in the economy, and they have some level of trust in the government’s policies.
Conversely, the survey found that 23 per cent of consumers said they expected business conditions to worsen in the next 12 months due to the high cost of living and crime rate. They also felt that the government is not doing enough to spur the economy and that the lack of employment and high inflation also spelt gloom.
Consumers also pointed to the impact of inflation on the cost of goods and services over the last year, with 87per cent of respondents noting that prices have increased significantly.
“They are telling us that they are facing a headwind in terms of increased prices over the last year, which they expect to continue,” Anderson said.