Jamaica Chamber of Commerce (JCC) general manager Patricia Peart (left) shares a light moment with Professor Richard Curtin (right), head of survey research unit at the University of Michigan, and pollster Don Anderson. (Photo: Spaulding)

Business confidence actually increased in the last quarter of 2009 while consumer confidence remained low amid doubts that economic conditions that will lead to more jobs.

The Jamaica Chamber of Commerce (JCC) Conference Board’s Index of Business Confidence was 106.6 in the fourth quarter 2009, a 19 per cent increase over the corresponding period the year prior and a 41 per cent improvement from the all-time low recorded during the first quarter of 2009.

According to the survey, although there was uncertainty about the strength and pace of recovery and concerns about a perceived lack of aggressive and focused government policies aimed at fostering economic growth, most of the firms surveyed expressed a belief that the country had already experienced the worst of the recession.

“Indeed, the only component to worsen in late 2009 was (businesses’) assessment of the investment climate as government and IMF policies were viewed as drags on potential future economic growth. Nonetheless, there was a growing belief among Jamaican firms that the economy had begun to improve due to the stabilization of the US economy,” the survey said.

The firms’ assessment was made against the background of dismal profits. Among the companies surveyed during the fourth quarter, 40 per cent reported that last year’s profits were less than they had anticipated, down from the all-time peak of 49 per cent recorded in the third quarter but still above the 34 per cent recorded during the corresponding period the year prior.

Weaker domestic and external demand was cited for the profit decline despite their efforts to cut costs.

However, higher profits margins during the next twelve months were expected by 54 per cent of all firms, while 58 per cent expected substantial improvements in their overall financial balance sheets.

On the other hand, consumer confidence remained low. According to the surveyors, the Index of Consumer Confidence was 102.1 in the fourth quarter of 2009, well below the 125.7 recorded during the corresponding period the year prior.

“Like other economies, the biggest roadblock to a more favorable recovery involves job creation, an issue that was cited repeatedly by consumers in the latest survey,” said the Jamaica Conference Board. “Jamaicans, like many Americans, had qualms about whether the government’s policies have been effective and about the declining value of the currency.”

The responses from consumers painted a daunting picture of their mindset:

— Just one in 20 consumers rated current conditions in the economy as favourable while the number of persons who expected overall economic conditions to worsen doubled the number of which expected improvement;

— Among all consumers, 92 per cent reported that jobs were scarce, barely worse than the first three quarters of 2009 but the highest percent ever recorded. Better job prospects were anticipated by a mere 23 per cent of respondents;

— During the fourth quarter of 2009, 37 per cent of consumers expected income gains, up from 32 per cent in the prior quarter, but well below the 52 per cent during the fourth quarter of 2008; and

— Spending plans on motor vehicles, homes, and vacations during the 2009 fourth quarter were all down from the corresponding period the year priod.