CONSUMER confidence remains resilient, yet spending plans stagnate, according to the latest findings from the Jamaica Chamber of Commerce’s consumer and business indices for the first quarter of 2024.

For the first three months of 2024, the consumer index showed a minimal decline in consumer confidence, hovering at 174.4, less than one percentage point lower than the previous year. Along with this, 73.7 per cent of consumers perceived current business conditions as favourable, marking an increase from 63.9 percent the previous year. Despite the positive outlook, Don Anderson, chairman and CEO of Market Research Services Limited, observes a concerning trend of stagnation in consumer spending intentions. Anderson underscores the necessity for in-depth analysis of spending patterns to better understand this phenomenon.

The percentage of individuals planning to purchase a home has decreased slightly from 15.7 per cent in the first quarter of 2023 to 14.9 per cent in the same quarter of 2024. Additionally, the majority of consumers are adhering to their previous spending patterns, with vacation expenses remaining a priority for many.

“There’s hardly any change anticipated in consumers’ purchasing intent; they’re saying, well, we have seen the economy isn’t likely to grow significantly, current business conditions aren’t moving rapidly, and therefore, in terms of our own purchasing intent, we are pretty stagnant; we haven’t really seen or had any intent to move this situation forward,” Anderson remarked, commenting on the trend.

More consumers also believe the economy would be better in 12 months, although the difference between the last three months of 2023 and the first three months of 2024 is minimal, increasing only from 27.2 to 27.8 per cent.

“Consumers are pretty unmoved by the perception of the economy, the perception of the way in which their own situation will change, and now, in terms of business conditions, the same number expects business conditions to become better than they were in the fourth quarter of 2023,” Anderson commented.

While less than a third of respondents believed that business conditions would improve, they cited several reasons for their sense of stability in consumer perceptions of the economy. Expectations for business conditions closely mirrored those of the last quarter of 2023, with factors such as optimism, signs of economic recovery, increased entrepreneurship, and growth in select sectors contributing to the improved sentiments.

On the other hand, among those who believed conditions would worsen, there was a marginal decrease from 33.1 per cent in the fourth quarter of 2023 to 29.6 per cent in the first quarter of 2024. These consumers cited persistent economic challenges such as high living costs, unemployment, crime rates, and perceived government inaction. Anderson emphasised the need for proactive measures to address these issues and foster sustainable economic growth.

“Fifty-nine per cent of the people who volunteered said crime and violence were the most critical issues that needs to be addressed urgent, next, unemployment at 17 per cent,” revealed Anderson.

Acknowledging the growing expectation of job displacement due to technology, Anderson emphasises the importance of embracing technological advancements, particularly AI, and their implications for job security. Interestingly, a significant shift has occurred in the perception of job security amid technological advancements. Forty per cent of respondents did not feel that their jobs are under threat by technology, marking a 10 per cent reduction from the prior year, fewer than 20 per cent hold the belief that their jobs are likely to be replaced by technology.

“There is a sense of urgency in terms of moving towards greater appreciation of AI and its implications for job security, so we need to note these numbers,” Anderson emphasised.

Business confidence has remained stable over the past two quarters, maintaining a steady level of 139.7 for the first quarter of 2024, mirroring figures from the same period last year.

A notable increase in market confidence is evident, with 62 per cent of businesses expressing a favourable outlook for investment, representing a significant rise from the 56 per cent recorded the prior year. Expectations regarding firms’ financial performance and profits have also remained consistent, with figures falling within the range of the 70th and 60th percentiles.

Perceptions of the economy have shown minimal change, with 41 per cent of businesses maintaining their views from the previous quarter.

“Both businesses and consumers are currently stable in their assessment of the economy and their own situations. While there hasn’t been a significant decline in confidence, we’ve observed a slight increase,” remarked Anderson.

Business confidence has remained stable over the past two quarters, maintaining a steady level of 139.7 for the first quarter of 2024, mirroring figures from the same period last year.

A notable increase in market confidence is evident, with 62 per cent of businesses expressing a favourable outlook for investment, representing a significant rise from the 56 per cent recorded the prior year. Expectations regarding firms’ financial performance and profits have also remained consistent, with figures ranging in the 70s and 60s.

Perceptions of the economy have shown minimal change, with 41 per cent of businesses maintaining their views from the previous quarter.

“Both businesses and consumers are currently stable in their assessment of the economy and their own situations. While there hasn’t been a significant decline in confidence, we’ve observed a slight increase,” remarked Anderson.

Looking ahead, 42 per cent of businesses anticipate an improvement in business conditions within the next 12 months, marking a two percentage-point drop from the fourth quarter of 2023. Optimism surrounding the economy’s recovery, government policies, and increased disposable income fuel these expectations, with businesses foreseeing opportunities arising post-recession. Conversely, only 19 per cent of businesses anticipate worsening conditions, citing concerns over increasing crime rates as a primary driver.

“The majority of businesses we interviewed highlighted crime and violence as the most critical issue requiring urgent attention. It surpasses all other concerns,” emphasised Anderson.

Regarding technological investment, 43 per cent of businesses prioritise social media advertising, indicating a strategic shift towards digital marketing. These findings were derived from interviews with 110 businesses spanning various industries. Approximately 638 individuals were interviewed for the consumer section across the island, constituting a national representative sample.