Consumer and business confidence up
…but still not at pre-COVID levelsWednesday, July 21, 2021
Consumer and business confidence in the economy has recorded encouraging improvements for the second quarter of 2021.
Don Anderson, in presenting the latest findings of the Jamaica Chamber of Commerce business and consumer confidence indices yesterday, indicated that the consumer confidence index increased to 149.8 points in quarter two (Q2) of 2021, up from 120.7 points in the previous quarter (Q1).
While this shows an improvement, Anderson noted that it does not closely approximate the previous periods before the novel coronavirus pandemic.
Nonetheless, consumers' perspective of business conditions and jobs resulted in current economic conditions recording the highest since Q1 of 2020 with 146.2 points, while expected economic conditions is up from 121.1 points in Q1 of 2021 to 151 points in the period under review.
Forty-three per cent of consumers are of the view that business conditions will get better, 33 per cent believe that business conditions will remain the same, while 24 per cent are of the view that it will get worse.
According to Anderson, the fluctuation in confidence since Q2 of 2020 points to uncertainty among consumers about the future.
“It is no more than an indication perhaps that consumers are thawing after battering from COVID-19 for most of 2020 and in the first quarter of 2021…We need more quarters of data to say whether we have in fact turned the corner and are achieving higher consistent levels of confidence amongst the consumers,” the pollster said.
He further indicated that the index has tracked below 150 points over the last four quarters consistently, representing the lowest range since quarter three of 2017.
Likewise, Anderson described the movement in business confidence as “unpredictable”, with fluctuations reported each quarter since the beginning of the pandemic in Q2 of 2020.
“Very consistent with the consumer perspectives where in none of these scenarios is the current index close to the peak of over the last three to four years, so whilst there has been an increased optimism, we need to note two main factors — there has been noticeable fluctuation; and that business confidence has not been restored to previous levels despite a significant improvement since the start of the year,” Anderson contended.
For the period under review, the business confidence index has increased to 130.8 points, up Q2's 115.2 points, and surpassing the high of the last quarter of 2020 (128.3 points).
Firms' optimism about current business conditions have also increased over the last quarter from 126.6 points to 146.0 points in the second quarter 2021. Fifty-seven firms are convinced it is a good time to invest, this is up from the 49 per cent recorded in Q1.
However, businesses continue to report uncertainty about the future of the economy with fluctuations in this index reported quarter on quarter since Q2 of 2020.
This, Anderson said, is consistent with their expectations for business conditions. A downward turn in the index was noted in Q1 of 2020 from 139 points to 126 points. Q2 has now recorded an increase to 149.5 points.
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