CONSUMER confidence in the third quarter of 2013 fell to the lowest it has been since the second quarter of 2003 and the second lowest on record.
For businesses, managers were as pessimistic as they were in the first quarter of 2009, and were only more optimistic than in two other quarters since the Jamaica Chamber of Commerce Conference Board (JCB) started surveying confidence in 2001.
The sliding dollar and the high level of joblessness was the primary reason for the more bleak outlook among firms and consumers alike.
Higher unemployment weakens domestic demand, which reduced revenue and profit for businesses, while the lack of job prospects make consumers all the more wray of fiscal consolidation by the Government.
"When asked to explain their reasoning in their own words, the weakened prospects for the economy were attributed to job losses, devaluation, and the lack of government plans for meaningful improvement," said a press statement issued by the JCB. "Although consumers were aware of the economic costs of the rebalancing federal debt and taxes, such foreknowledge does not ease the pain of actual income and job losses."
The dismal job outlook was the dominant complaint when consumers were asked to explain their views about the economy -- 92 per cent of respondents believed that jobs were scarce and hard to get in the most recent survey.
Indeed, more cautious spending was voiced by consumers.
Home buying plans fell to the lowest-level recorded in a dozen years (just five per cent said they were looking to purchase a house), vehicle purchase intentions were the lowest in a decade -- 12 per cent of consumers were considering buying a car compared to 15 per cent a year before -- and vacation intentions were held by 24 per cent in the third quarter of 2013, down from 28 per cent a year earlier and the lowest since the 2009 recession trough.
Investment plans by companies were also less favourable.
"When asked about their future investment plans, 60 per cent thought it was a bad time to make new investments in the third quarter, up from 42 per cent in the prior quarter and 52 per cent in last year's third quarter," said the press release.
Investment plans were likely negatively impacted by worse-than-expected profits -- 50 per cent of all firms surveyed said that profits were lower than anticipated in the third quarter, the highest level recorded since 2001.
The JCB said that the data suggest that firms did not correctly anticipate how front-loaded the costs of the Government's programme to reduce public debt would be.
"Firms viewed prospects for the national economy less favourably than any other time in the last eight years," added the JCB in its press statement.