Business confidence set to recover

Business confidence levels dipped in May this year, as measured by the Bank of Jamaica Perception of Present and Future Business Conditions survey and by the stock market movements. The local stock market has since rebounded and is close to its historic peak at Mid July, an indication that business confidence levels are set to rebound when measured in the summer months.
No new data is out from Jamaica’s central bank, of the latest levels. With the stock market having been rebounding, government fiscal program ahead of target and the Jamaica dollar settling down recently, the prospect of a rebound in survey numbers seems to be on the cards. Historical data indicate that the stock market is one of the best measure of business confidence levels, with the chart showing how closely the market index tracks the movement of future business confidence.
According to the survey findings, the perceptions of both present and future business conditions moderated compared to the record highs of the previous two surveys (see chart). Notably, the index of present business conditions fell 6 percent to 213.1 from the 226.1 attained in the previous survey. The index of future business conditions declined more slowly than the current measure by 2.6 percent from 171.5 in the previous survey to 167.1.
Both indices reflected declines in the proportion of respondents of the view that conditions were or will be “better.” In addition there were increases in the number of respondents indicating that conditions were or will be “worse.” There was, however, an increase in the proportion of respondents that indicated that conditions were or would be ‘about the same’ for both indices.