Consumer confidence among businesses, consumers still trending upwards
The Jamaica Chamber of Commerce-commissioned business and consumer confidence indices indicate that optimism among businesses and consumers remains on an upward trend.
The business confidence Index increased to 151 points in the first quarter of 2019, compared to the first quarter of 2018, when it dipped to 136, and represented an increase above December 2018, when it stood at 147.5.
Consumer confidence increased to 177.5 points, compared to 175.5 in the December 2018 quarter and 156.4 in the first quarter of 2018.
Managing director of Market Research Services Limited, Don Anderson, said that overall, there was no meaningful change but that the 2019 first-quarter results showed economic expectations at their highest since the start of the survey in 2001.
Notably, he said, 70 per cent of firms shared a willingness to invest in new plants and equipment in the 2019 first-quarter survey.
“Over 70 per cent of all firms surveyed continued to agree that the time was right for expansion,” he said. “More than half the firms surveyed, 56 per cent, indicated that they had solid plans to increase the level of capital investment over the next 12 months,” he continued.
He said firms were concerned mostly about crime and, secondarily, about fluctuations in the value of the dollar against its United States counterpart, which made planning difficult.
Anderson said businesses also said they were not optimistic about financial gains and profits. When asked to assess the firms’ financial prospects, 74 per cent, down from 78 per cent, expected gains in the year ahead, and 69 per cent, down from 71 per cent, expected improvements in profitability.
The research firm, which conducted the survey on behalf of the Jamaica Chamber of Commerce (JCC), introduced a new chart indicating that construction, transport and communication were chief among the areas listed for investment. Businesses involved in agriculture and manufacturing activities indicated low levels of investment intentions.
Anderson noted that consumers were consistently more optimistic than firms, noting that the JCC had begun to track remittances as a responsible factor. He said that an average of 34 per cent of Jamaicans received remittances over the last seven years.
The 2019 first-quarter survey showed that expectations for income gain among consumers were unchanged and that remittances were received by 36 per cent of consumers.
Consumers’ assessment of current economic conditions remained stable, as well, with an index of 203 points compared to 209 points in the December 2018 quarter. Their expectations of their future grew marginally from 164 to 167 points.
Anderson said that while survey participants did not expect to secure new jobs, they said they observed family members securing jobs in construction, the business process outsourcing sector, and tourism industry.
The majority of consumers in the survey for the first quarter of the year did not anticipate purchasing either a home or car or taking a vacation in the year ahead.
Just 36 per cent of the respondents indicated their intention to take a vacation. Among those, 64 per cent said they would travel overseas and finance the trip from personal savings, the survey showed.