J’can firms and consumers increasingly optimistic about economy

Jamaican shoppers at a Puma store in Kingston.

JAMAICA’S business confidence is at its highest level in eight years as firms continue to express confidence that the economic policies of the government will improve the economy and the financial health of businesses.

Concurrently, the Jamaica Chamber of Commerce (JCC) pointed out in its first quarter business confidence survey, that there has been an ‘ease’ in how fast businesses expect the economy to grow, with 39 per cent of businesses expecting growth to improve down from the 44 per cent it recorded a year earlier.

Meanwhile, consumer confidence has also improved, gaining 32 per cent since its recent low was recorded six quarters ago, reaching its highest level since the closing quarter of 2012.

“Consumers became more confident at the start of 2015 that the gradual improvement in the economy would ultimately provide improved income and job gains as well as a lower inflation rate,” according to the report.

The Consumer Confidence Index rose to 114.3 in the first quarter 2015 survey, up from 110.0 in the fourth quarter and 104.7 in the first quarter survey of 2014.

But that result was somewhat overshadowed by the Business Confidence Index, which climbed to 131.9 in the first quarter of 2015, up from 122.9 in the fourth quarter and substantially above the 117.8 in the first quarter of 2014. The only survey to find a more optimistic outlook among Jamaica’s business firms was in the third quarter of 2007 when the Index reached 134.2 at the peak of the last expansion, according to the JCC.

“While firms have become more realistic in this assessment of economic growth, they were still more likely to expect continued gains rather than any deterioration in the economy,” the recently released report stated.

The report stated that while business firms have expressed confidence that the economic policies of the government will act to improve the economy as well as their own firm’s prospects, “the implementation of such a comprehensive policy has drawn nearly as many complaints as compliments since certain aspects of the policy mix will benefit some and disadvantage others.”

“But make no mistake: the economic policies of the Government have significantly improved economic prospects, and their steadfast commitment to the policy is essential to erase any lingering uncertainty about its full implementation,” the report added.

The investment climate has reached its highest with 74 per cent of firms expecting their financial health to improve during the year ahead, up from 62 per cent in the fourth quarter of 2014 – the highest percentage ever recorded.

“Just 6.0 per cent anticipated that their firm’s finances would worsen during the year ahead in the first quarter 2015 survey. Importantly, the greatly improved expectation by firms for their financial health was widespread across all types of industries as well as among all sizes of firms,” the JCC said.

Source: http://www.jamaicaobserver.com/business/J-can-firms-and-consumers-increasingly-optimistic-about-economy_18811079

Published Date: April 24th, 2015