BUSINESS and consumer confidence saw a gradual downward movement during the first quarter of 2023, with 52.3 per cent of people sharing the view that the economy will worsen within the next 12 months.

Chief executive officer of Market Research Services Don Anderson made the disclosure during the 2023 first quarter business and consumer confidence indices webinar on Wednesday.

Consumer confidence fell 2.7 per cent and business confidence fell 5.5 per cent with both categories having similar trends and expectations for 2023.

“It’s not usual for consumer and business confidence to have an identical pattern movement,” Anderson revealed.

He explained that there was a reversal of the gradual growth and improvement over the increase in consumer confidence during 2022. In breaking down the findings, Anderson revealed that among the 600 people interviewed across the island, it showed that people had a more optimistic view of current business conditions than they did in the first quarter of 2022.

Eleven per cent of people thought business conditions were good last year, that number increased to 15.7 per cent in 2023 resulting in a reduction in the number of negatives from 24 per cent to 20 per cent.

While making it clear that consumers have never felt that jobs were really significantly plentiful, this year showed a slight improvement in the amount of people who believed more jobs were becoming available. Current jobs was 5.1 in the first quarter of 2022 compared to 11.2 in 2023. Anderson contended that consumers are saying, “at this point in time business conditions are good and I believe that jobs are becoming more readily available.”

However, 50 per cent felt that jobs were in short supply, a general observation he said has been picked up over the years.

There was also a slight decrease among consumers who felt business conditions were going to be better. It decreased from 38.9 per cent to 29.8 per cent, with consumers feeling not positive about business conditions going forward which has reflected negatively in how consumers saw jobs going forward.

“[A] 38.9 per cent in the first quarter of 2022 said they expected the job situation to get better, but when we look and fast forward to the first quarter of 2023, that number has fallen to 33.5 per cent,” he said.

Despite consumers seeing business conditions not improving, 48.7 per cent of people interviewed said they expected their household income to improve, that’s up from the 44.6 per cent in 2022.

” It is interesting, therefore, it’s almost counterproductive and counter-intuitive that despite this, consumers are saying, well, we expect our household income to change,” Anderson said. A similar pattern was observed in businesses as well. Businesses expected their firm’s finance to improve with the results showing an increase from 18.9 the previous year to 20.2 in 2023.

More consumers indicated that they will be purchasing more homes, vehicles and taking more vacations this year.

“Whilst consumers are negatively inclined in terms of progress going forward in 2023, they also at the same time saying, ‘well, we’re going to burst out and do things’; vacation, in particular, is what they are looking at,” added Anderson.

A 21. 8 per cent believed business conditions would get better compared to 30.7 per cent in 2022; however, Anderson revealed that a whopping 52.3 per cent of people said the economy will worsen in the next 12 months.

“They point particularly to the high cost of living, the cost of acquiring things that they need for their daily household existence,” he said, while highlighting the main reasons given for the response.

Other reasons cited were the high crime rate, the belief that the Government is not doing enough for the economy, lack of employment and brain drain.

Similarly, businesses were not optimistic about the economy improving; there was a substantial reduction in the number of businesses that thought things were going to be better, that percentage fell from 56.4 to 41.3.

“So the pattern between consumer reaction to things going forward in 2023 and the pattern of businesses looking at the thing going forward in 2023 up to this point in time is following along the same trajectory,” Anderson said. However, businesses believe it will take a while for the economy to pick up. In the meantime, they will be challenged by global supply chain issues.

” The economy doesn’t expect to improve that quickly, high prices for goods and services global trends, increase in crime, these are factors that they are putting forward as things that will retard the growth of the economy during 2023,” Anderson read out as the reasons given for businesses for their views on the growth of the economy.

Despite these beliefs however, nine per cent more businesses thought it was a good time to invest. Anderson explained that while the first quarter of 2023 was not so positive, businesses are showing a considerable amount of resilience.

“They [businesses] know that the way to recover quicker would be to invest and manage their businesses properly,” he said. He further went on to say ” I think it is not a counter decision, it is a conscious decision by them to say the way in which we can recover is to actually invest in our businesses rather than take a position that we just have to wait until the thing settles.”

The report was collected via a nationally representative sample survey of the general public, ages 18 years and over. Approximately 600 people or more were targeted to be interviewed on a regular basis throughout the year, and a minimum of 100 companies across all industry types were also targeted.