RUNAWAY inflation stoked by rising prices has caused consumers to dim their views of future prospects, according to the latest findings of the Jamaica Chamber of Commerce (JCC)-commissioned Business and Consumer Index survey.

Don Anderson, the pollster and principal of Market Research Services Limited, also warned that waning prospects could show a significant hit when the next survey is done “unless there is a major positive interjection”.

Anderson, presenting the findings of the latest survey, said that despite a dip of 0.6 percentage points in the consumer index during the second quarter of this year when compared to the previous quarter, the rising cost of goods remains a high point of concern for consumers still recovering from COVID-19-induced traumas.

“Consumers have expressed great concerns about the price increases, as their disposable incomes is not changing by any stretch of the imagination to keep pace with the changes in price levels. When asked about the future and what’s ahead, 98 per cent or close to everybody in the consumer panel said they expected prices to go further up over the next 12 months,” Anderson said.

“They are beginning to think negatively and we can see that reflected in the overall fall in the consumer confidence index from 157 to 156. We feel therefore that consumers are not in an optimistic or buoyant mood as they begin to reflect negatively on current situations. We therefore have to look forward to the next quarter to see how this will play out,” he added, noting that consumer index, though slightly improved since 2020, was still nowhere back to pre-pandemic levels when compared to the 180.2 recorded in 2019. Consumer confidence in the latest survey was 23 points below the pre-pandemic level.

Acknowledging data which show confidence at a 41-year low in the United Kingdom and down by 23.4 per cent for consumers and 15.8 per cent for businesses in the United States up to June, Anderson said Jamaica’s figures were trending in similar proportions when compared to those countries.

He said that as consumers grow more wary of current conditions, they are also now bracing for more difficult times ahead which they believe could lead to a further tightening of the economy, the prevalence of difficult business conditions, and fewer economic gains.

“Unless there is a major positive interjection, consumer confidence is likely to show noticeable decline in the third quarter of 2022,” Anderson stated.

Going forward, Anderson further said that consumers were found to be less optimistic about things becoming significantly better over the next 12 months. This, he said they believe, will also impact their ability to make purchases of items including homes and motor vehicles. The researcher added that while current remittance data show a 47 per cent increase in the amount of funds being received compared to three years ago, only 24 per cent of households were getting remittances.

Turning to businesses, the pollster said the survey — which polled some 100 enterprises across industries — found that confidence in this area plummeted by approximately 7.6 percentage points below that of the previous quarter, moving from 131.8 to 121.1.

Also concerned about the future and the impact of crime on their operations, he said businesses were found to be more concerned about weathering current challenges than being optimistic about current conditions.

Anderson said that with many businesses indicating they have been spending more to keep their operations buoyant, amid unending global political tensions and supply chain disruptions along with unstable foreign exchange issues, they too, like customers, have also expressed expectations for further price increases to continue even as they call on Government to manage inflation.

Inflation up to June was recorded at almost 11 per cent.

Thalia Lyn, chief executive officer (CEO) of fast food chain Island Grill, commenting on the findings said that for businesses, the prevailing uncertainties of the global environment are those things which are making it hard for businesses to effectively strategise. She said that even as some businesses remain optimistic, the play of wildcards — including constant price increases — pose some of the greatest threats.

“Even as revenues rise for businesses, consumers are suffering as they don’t have the spending power,” she stated.