BUSINESSES remain optimistic, but expect a slightly higher pace of currency depreciation for 2015, according to the Inflation Expectation Survey by the Bank of Jamaica (BOJ) published this week.

The perceptions of future conditions are close to five- year highs, but eased back slightly to 152.2 points from 157 points recorded in the previous December survey.

“Notwithstanding, the perceptions of present and future business conditions continue to display the upward trends,” stated the BOJ about the most recent survey conducted in February with 302 respondents.

Respondents expect the dollar to lose 3.8 per cent of its value over 12 months ending February 2016. That’s slightly more than the 3.0 per cent over 12 months recorded in the previous December survey. Businesses also expect inflation of 7.1 per cent for calendar year 2015 .

Wages and salaries

“Respondents indicated that they expect the largest increase in production costs over the next 12 months to emanate from higher cost for stock replacement. The cost of utilities was expected to be the second-largest contributor to higher production costs over the next 12 months. Also, the cost of raw materials was expected to contribute to higher production costs for the year ahead. Wages and salaries continued to be the input cost least expected to increase over the next 12 months,” stated the report.

The Statistical Institute of Jamaica undertakes surveys of businesses on behalf of the BOJ to ascertain the expectations of these economic agents about variables which are likely to have an impact on inflation in the near term.

“In this regard, the survey captures the perception of chief executive officers, managing directors and financial controllers about the future movement of prices, current and future business conditions and the expected rate of increase in wages/salaries,” explained the BOJ on the report, adding that these responses assist the central bank in charting future policy decisions.