Business, consumer confidence lowest since 2017 – JCCTuesday, October 20, 2020
KINGSTON, Jamaica— Jamaica's business and consumer confidence indices continue to decline, the Jamaica Chamber of Commerce (JCC) says, adding that the situation reflects economic and social uncertainty as the nation addresses the COVID-19 pandemic.
According to the JCC, business confidence in the third quarter of 2020, as reflected in data gathered between July and September, edged down from 115.4 in the second quarter to 109.2 – the lowest level recorded in the past 15 quarters dating back to 2017.
Meanwhile, consumer confidence slid from 165.2 in the second quarter of the year, to 135.3 – also the lowest point of the last 15 quarters.
The JCC disclosed the information during its conference board's release of results from its 3rd Quarter 2020 Surveys of Businesses and Consumers. The surveys, conducted by Market Research Services, were conducted among 604 consumers and 118 businesses across the island.
The quarterly release of the indices is now in its 20th year.
The chamber explained that among the contributors to the decline in business confidence were decreased optimism regarding firms' financial standing and future profits, the fact that returns on invested capital have not been at the expected levels, as well as the expectation that future business conditions will trend downwards over the short-term.
"Many businesses, however, are anticipating that their standing will increase by the third quarter of 2021, with a wide majority (81 per cent) anticipating recovery within 1-3 years," the chamber said.
"Interestingly, as the Christmas holidays draw closer, some 61 per cent of businesses have advised that they have no plans to execute any special activities over that period even as they are anticipating recovery beginning in 2021," it continued.
Where consumers are concerned, the JCC said their expectations of income gains, expanded job prospects and near-term purchasing plans have also recorded declines. Their expectations regarding the future of the has declined from 175.2 points in the second quarter to 127.8 points - the lowest since the first quarter of 2017.
"Understandably, the turnouts from the survey reflected the fact that both businesses and consumers have been impacted by COVID-19. Loss of revenue occasioned by the pandemic was reported by 62 per cent of firms and some 28 per cent of businesses reported that issues regarding the forced digital transformation of aspects of their operations are adversely affecting their expenditure or investment plans. Another 12 per cent pointed to difficulties in collecting receivables," JCC said.
Consumers, meanwhile, report that the primary impacts that they have experienced are in salary cuts and job losses.
"A significant number within the consumer segment have indicated that the option of starting their own business is emerging as an important survival strategy," said the chamber.
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