Optimism in the Jamaican economy remains at record highs for both businesses and consumers, with the Jamaica Conference Board’s Business & Consumer Confidence Indices for the second quarter of 2016 reporting “record favourable prospects for the economy”.

Firms remained more optimistic than in any other survery during the past 15 years — with the sole exception of last-quarter’s all-time peak, the survey said, while consumer conficence rose to its third highest level in 15 years.

The results were released yesterday at the Spanish Court Hotel in New Kingston.

“The survey recorded widespread positive evaluations of the Government’s policies as well as a widespread agreement that these policies have begun to stimulate economic growth and to create jobs,” the report said.

Meanwhile, for the months ahead, 74 per cent of companies project improvement in profitability.

Speaking at the release of the Indices, chairman of the Victoria Building Society, Michael McMorris, pointed out that business confidence is being influenced by the addition of seven new companies to the Jamaica Stock Exchange listing.

“The last two quarters you have continuing indications of initial public offerings (IPOs)… That has a self-reinforcing message for businesses,” he said, adding that the IPOs took place during an election season which was expected to be a volatile period for the economy.

Overall optimism among Jamaican businesses actually declined slightly from 144.6 in the first quarter to 141.6 in the second,due to profits not improving as fast as expected — but the report noted that expectations remained at a relative high.

The willingness of firms to invest in new plants and equipment reached a new peak, with a record 61 per cent of firms saying the time is right to expand productive capacity and take advantage of future opportunities. But the report also highlighted the need for firms to have more effective credit facilities so as to increase production and maximise exports.

McMorris explained, however, that the business continuity pursued by the current administration, along with the thrust for economic growth, has impacted significantly on the business environment.

“Where government is concerned, getting back to the table for privatisation — so the signal that Kingston Wharves gets done immediately after an election — is also, in that same vein, a positive sign that things are continuing to work,” the VMBS chairman said.

“The reality is that with Government, with all the changes in administration, things slow down, but certainly [with] the way that the Government has focused on putting growth mechanisms in place, have privatisation up and running, talking tourism — I think those things will help sustain what we are seeing,” he said.

A total of 64 per cent of firms in the second quarter anticipated improvements in the economy, the highest recorded “favourable prospects for the economy” in 15 years, while only 13 per cent had a gloomy outlook for the economy — compared to 30 per cent for the same period surveyed last year.

The Consumer Confidence Index recorded the third-highest figure since the survey has been in effect, and according to pollster Don Anderson, this move is attributed to consumers becoming more sophisticated.

During last year’s surveys, Anderson said he noticed a trend of consumer confidence remaining constant due to heeding the advice of stakeholders in the business sector.

“You know what, we’ve found that we don’t give the consumers enough credit; the consumers were buying into what the private sector was saying about growth, even if they weren’t seeing it in their pockets,” Anderson told the gathering.

“I believe the consumers are becoming more sophisticated than we are prepared to give them credit for. They have been listening to the rhetoric from the business community — from EPOC (Economic Programme Oversight Committee) and the experts in the economy — that were saying … the economy is growing, and the consumers were buying into that,” he added.

The statistician said the maturity of consumers was evident in the way they waited for “trickling down” of the effect of economic growth, even though they became impatient when this was not forthcoming.

To this McMorris added that, similarly, if the policies of the current administration do not produce as expected, consumers will again become frustrated. However, he said that the purchasing behaviour of conumers, where their spending patterns have indicated caution, is evidence of maturity.

A total of 69 per cent of consumers forecast improvement in living standards, especially with the hope of more job prospects. Consumers also expressed interest in purchasing homes and vehicles.

“The Government’s policies on economic growth and job creation cannot be successful without the full support of consumers. This includes behaviours that facilitate growth as well as those that reduce current barriers to a healthy Jamaican economy, such as crime, the informal economy, and tax compliance,” the Survey of Consumer Confidence report advised.