An uptick in consumer confidence and a less-than-optimistic outlook on the local economy amongst business leaders were the highlights of the Jamaica Chamber of Commerce Business & Consumer Indices webinar on Tuesday, which outlined the key takeaways from surveys conducted in the fourth quarter of 2023.

The surveys, which canvassed over 600 consumers and 100 businesses between September and December 2023, saw both business and consumers citing crime as a major concern.

Pollster Don Anderson — whose company, Market Research Services Limited, carried out the survey — noted that amongst consumers there was a more optimistic shift from the dim view many took immediately coming out of COVID-19, with consumers feeling much better about the economy moving forward. The better sentiments pushed the consumer confidence index up for a second-consecutive quarter, rising by 8.5 per cent to 174.4 points. Though the improvement represents “a significant increase in consumer confidence”, Anderson said the result is still “nowhere near the peak which we recorded in 2019 at 183.4”.

“[So] it is not back to the immediate pre-COVID [level] in 2019 but it does represent a significant positive shift from the recent lows of 120,” he said, referring to a depressed consumer outlook in mid-2021 when there was a spike in COVID-19 cases.

Anderson also pointed out that over the last 24 months consumer confidence has improved by 45 per cent.

“So it suggests that consumers are beginning to feel that we’re moving out of the crisis of COVID,” he continued.

Amongst the driving factors the pollster identified was a “noticeable improvement” in consumers’ perception of business conditions and how those business conditions impacted spending power. Year over year, the number of individuals citing good business conditions rose by 18.5 per cent when compared to 15.3 per cent in Q4 2022. This was also more than the 15.4 per cent uptick in Q3 2023.

At the same time, those who thought business conditions were average also showed marginal improvement from 66.1 per cent at the end of 2022 to 69.2 in Q4 2023.

“Therefore we can say, here’s another indication that consumers are feeling a little bit more comfortable about current business conditions and that is feeding into that 8.5 per cent improvement in overall consumer confidence,” Anderson explained.

Despite unemployment dipping to 4.5 per cent, based on figures coming out of the Statistical Institute of Jamaica, the number of consumers who perceived jobs to be plentiful remained within the 9 per cent to 11 per cent range. Meanwhile, those who said jobs were adequate jumped from 42.8 per cent in Q4 2022 to 49.3 per cent in the period under review.

Expectations of a better supply of jobs increased between Q3 2023 and Q4 2023, but was down by 2 per cent year on year. Those projecting that the job market will remain the same, however, improved from 43.6 per cent in Q4 2022 to 48 per cent in Q3 2023, and 50.2 per cent in Q4 2023.

Half of consumers polled expressed optimism that their jobs will not be impacted by technology, while 18 per cent were unsure about their jobs being replaced, while 9 per cent said there was a likelihood of losing their jobs to technology, and 5 per cent felt strongly about losing their jobs to technology.

While expectations on income levels changing remained relatively stable, the number of consumers indicating plans to make major purchases increased across all three categories. Consumers planning to buy a home, purchase a vehicle or spend on vacations increased both on quarterly and year on year bases.

Aside from general optimism, the reasons consumers gave for their positive outlook included: growth in entrepreneurship, improvement in economic indicators, new investment, and growth in some sectors.

On the other hand, high cost of living, lack of employment, increase in crime, lack of Government intervention, and unstable foreign exchange rates were noted as factors dampening business outlook over the next 12 months.

Seventy per cent of businesspeople responding to the survey cited that crime and violence will continue to overshadow growth prospects for the country, representing a 12 per cent rise over Q3 2023 responses. A similar growth rate was observed amongst business respondents in that respective survey.

According to Anderson, business confidence in Q4 2023 fell by 3.9 per cent to 139.7 points, though still higher than annualised confidence rates recorded in 2020, 2021 and 2022.

While the number of businesses reporting either better-than-expected profits or earnings within the projected range improved year on year, there was a decline in those who believed that circumstances were accommodating to investments and expansion.

“What we find is that businesses are less confident about this being a good time to invest than they were a year ago,[and] than they were three months ago,” the pollster outlined.

“And we could only put that down, based on the data that we have, to a kind of cautious approach on the part of businesses based on what they saw happening around them and where they thought the economy was going,” he added.

Looking ahead, significantly fewer businesses were optimistic about their finances, profitability, and the economy. While businesses believed the economy is recovering and that some sectors, such as tourism, will contribute to overall improvement of the economy, along with implementation of government policies, they also cited unstable foreign exchange rates, high prices of goods and services, and increasing crime as downside risks.

Based on the survey, the industries that should benefit most from the highest capital investments are wholesale and retail; transport, storage and communication; and farming and agriculture.

In relation to business expansion, it was noted that access to finance, high input costs, costs of foreign exchange, and shortage of skilled/qualified labour were deterrents.