JAMAICAN businesses are upbeat about the country’s economic prospects in 2025, driven by expectations of a boost in consumer spending power.

The Jamaica Chamber of Commerce’s (JCC) latest Business and Consumer Confidence Indices, released Tuesday, reflect this optimism.

“Businesses are buoyant; the index is almost at its all-time high, which we recorded in 2019 before COVID,” said Don Anderson, CEO of Market Research Services.

Jamaica’s Business Confidence Index surged 12.9 per cent to 149.3 in the first quarter of 2024, signaling a significant improvement in business sentiment. Additionally, the latest survey revealed that nearly half of respondents, or 49.5 per cent, expect the economy to strengthen over the next 12 months, up from 35.6 per cent in the previous quarter.

The small business sector and power supply industries are poised for growth, with 23 per cent of businesses expressing optimism about their prospects over the next 12 months. This represents a 30 per cent increase in confidence from the previous quarter, indicating a significant uptick in sentiment among these industries.

Businesses in Jamaica are translating their optimism into concrete investment plans, with farming companies leading the charge. The proportion of farming businesses planning to invest surged to 71 per cent in the fourth quarter of 2024, up from 22 per cent in the previous quarter. Wholesale and retail businesses also significantly boosted their investment intentions, rising to 70 per cent from 31 per cent. In contrast, the tourism and hospitality sector saw a decline in investment plans, falling to 55 per cent from 67 per cent in the third quarter.

“It varies year by year, but we can see significant growth in investment intentions across almost all sectors,” Anderson noted.

Jamaican businesses are cautioning that despite their optimism, several challenges may hinder expansion plans. High interest rates top the list of concerns, with 21 per cent of respondents citing it as a major obstacle, up 13 percentage points from the previous quarter. Other significant hurdles include high input costs, cited by 20 per cent of respondents, and a shortage of skilled labour, identified by 17 per cent. Additionally, crime and violence remain a pressing issue, with nearly half of respondents, or 48 per cent, expecting the situation to deteriorate over the next 12 months.

Confidence in expanding renewable energy initiatives appears to be waning among Jamaican businesses. While 83 per cent of respondents identified LED bulbs as a key component of their plans, and 36 per cent cited solar panels, the enthusiasm for additional conservation strategies was muted. When asked why they weren’t considering more initiatives, 38 per cent of respondents declined to answer, while others cited lack of knowledge, insufficient funds, or tenancy issues as obstacles to pursuing energy-saving measures.

Cecil Foster, founder and managing director of FosRich Company, expressed surprise at the survey’s findings, given his company’s extensive efforts to promote renewable energy awareness. FosRich has trained 100 solar installers over the past 18 months, who have worked with households and businesses to implement renewable energy solutions, underscoring the company’s commitment to driving adoption of sustainable energy practices.

“In the consumer space, there’s a level of buoyancy that we’ve never seen before for renewable energy products; the demand is just blowing up for solutions,” said Foster during a panel discussion following the findings. “On the business side, there is more lethargy there where people are holding back a little. They [businesses] say they want to go, but they are holding back. Again, we know why, and it’s because of affordability.”

Despite the challenges faced by businesses, demand for renewable energy solutions remains on an upward trajectory. Michelle Chin Lenn, deputy CEO of Wigton Energy Limited, noted that renewable energy has emerged as the fastest-growing segment of the global energy sector, fueled by rapid advancements in electric vehicles and battery technology.

“Energy is the lifeblood of the economy, and a significant portion of our GDP is spent importing fossil fuels. Solar energy prices have dropped by 75 per cent over the last decade, and battery costs have fallen by 82 per cent, making renewables more affordable than ever,” she said.

Chin Lenn added that the payback period for renewable energy investments has decreased from nine years to just three, highlighting the economic viability of transitioning to clean energy.