Business, consumer confidence down for 2021 Q1Wednesday, April 21, 2021
The year 2020's last quarter upsurge in business and consumer confidence was “short-lived”, said pollster Don Anderson as the indices declined to 115.2 points and 120.7 points, respectively, in the first quarter of 2021.
Anderson, in presenting the latest findings of the Jamaica Chamber of Commerce business and consumer confidence indices yesterday, indicated that the decline in business confidence mirrored the second quarter of 2020 — the early stage of the novel coronavirus pandemic — which recorded 115.4 points.
Firms' optimism about current business conditions also declined to 126.6 points, down from the 132.3 points recorded in the previous quarter, but they are still widely of the opinion that it is a good time to invest (49 per cent), although not as buoyant as previous years.
Businesses do, however, remain uncertain about future business conditions (down to 110.7 points) and future of the economy (down to126.6 points) as the indices continues to fluctuate quarter on quarter.
Fifty-seven per cent of businesses highlighted that crime and violence remains the most critical issue that the country faces at this point surpassing issues related to the pandemic.
While business do not expect improvements in their financial standing they also do not expect them to get worse although profits are down. They remain optimistic about the economy, however, on the grounds that the pandemic will be under control by then, Anderson said.
On the other hand, 35 per cent of consumers indicated that controlling the spread of the virus remains the most important thing the Government should focus on.
Consumers' optimism on current economic conditions also declined, recording 119.7 points — the lowest since the third quarter of 2015. Consumers' perspective of business conditions is primarily responsible for this decline.
In the previous quarter, the proportion of consumers who consider business conditions to be bad was 28 per cent, this has increased to 36 per cent in the quarter under review. The proportion who are of the view that jobs are in short supply marginally moved from 79 per cent to 80 per cent.
However David Wan, president of the Jamaica Employers Federation, pointed out that the association has seen an increase in employment in certain areas of the economy and that some members have indicated their intentions to increase hiring.
He added that the business process outsourcing sector indicated that it had a 12-13 per cent decline in employment during coronavirus pandemic but have assured that it has continued the growth momentum.
Wan noted that there may be more hiring in the construction and real estate industries.
According to the survey, expected economic conditions is down meaningfully from 131.7 points recorded in the previous quarter to 121.1 point in the first quarter of 2021.
The small upward movement in this index between the third quarter (127.8) and the fourth quarter of 2020 (131.7) appeared to be directly related to the festivities of the Christmas season, the survey indicated.
Interestingly, while consumers expect no improvement in jobs and business conditions over the next 12 months, they expect an increase in their personal income.
Consumers' expectations for income gains increased marginally, moving from 108 to 110 index points. Anderson noted that this was the only component in the expected economic conditions index that did not decline, despite consumers being “pretty pessimistic about their situation going forward”.
“The Bank of Jamaica released data quite recently that showed there has been a 38 per cent increase in net remittances between the first quarter of 2021 and the first quarter of 2020. It is clear from other data that we have that consumers are heavily reliant upon remittances to be able to meet their day-to-day expenses,” Anderson said, noting that it is one of the factors that drives consumer resiliency.
Now you can read the Jamaica Observer ePaper anytime, anywhere. The Jamaica Observer ePaper is available to you at home or at work, and is the same edition as the printed copy available at https://bit.ly/epaper-login