CONSUMER confidence during the last quarter of 2021 grew some 23.9 per cent even as businesses gauge optimism amid the current economic environment.
According to the latest data from the Jamaica Chamber of Commerce (JCC) Business and Consumer Confidence survey conducted by pollster Don Anderson, the consumer index increased to 140 points, up from 129 points in the third quarter.
“This represents a reversal in the fourth quarter when compared to the downturn that we had experienced during the first three quarters of 2021, which were so low,” Anderson said during his presentation of the findings yesterday.
The significant growth in the consumer index, the pollster believes, stemmed from the data findings which showed improved optimism among customers that current business conditions were good, as seen by their increased spending patterns, especially during the Christmas period, coupled with expectations that conditions will also get better over the next 12 months. A number of them were also said to be feeling generally better about the availability of jobs and the likelihood of securing employment.
Anderson, in highlighting the reasons consumers believe conditions will get better in 2022, cited general optimism along with increased confidence in government initiatives, growth in some sectors, people returning to work, and things trending in the right direction, as the top reasons. Consumers, however, believe conditions could also worsen in light of rising prices, lack of employment opportunities, setbacks from the pandemic, poor Government decisions and high crime rates.
Business confidence on the other hand, however, grew to lesser proportions, averaging some 8.2 per cent and increasing its index to 125 points, up from 122 points in the previous quarter.
Though cautiously optimistic about the economy, the study found that businesses continue to harbour some uncertainty about the future amid the constant evolutions of new COVID-19 variants, along with the potential impact on profits and investments.
“One of the reasons for the difference in the kind of movement in consumer confidence vis a vis business confidence is that consumers tend to be more knee-jerk whereas businesses tend to be more long term and, as a result, more conservative in their thoughts and changes.
“In a nutshell, what we see is certain consistencies in the movement of business and consumer confidence, as both move in parallel positions but to different degrees,” Anderson stated, noting that despite the upticks seen in quarter four, the general data for 2021 was still significantly below that of pre-pandemic quarters.
He noted that included in the rationale given by businesses on how the economy could get better this year were: the full reopening of the economy, a rebound in tourism, and learning to exist with the virus as chief among the reasons. On the downside, some businesses noted the instability of the Jamaican dollar, high prices, and high crime rates as being among the greatest risk factors.
Anderson, in pointing to some other survey findings, noted that plans by firms to increase capital expenditure in 2021 show the farming and agriculture industry leading these investments, up some 20 percentage points over the prior year.
“We are happy to see plans for the agriculture sector where 57 per cent investments were being targeted. Agriculture has a way of lifting the entire economy so this is very good,” said Ian Neita, president of the JCC, in welcoming the data.
“I think the process of recovery and confidence is still very fragile, as crime and the uncertainty of the pandemic continue to infiltrate society,” he further said of the survey findings.