Business expectations in the Eastern Caribbean states are mixed. That should not be too surprising as the region is in recession with negative inflation for the first three months of the year. In a business survey carried out by the EC Central Bank, 37.4 per cent of the businesses surveyed indicated that they anticipate that general economic conditions would improve in the first half of 2013, while 23.6 per cent expect economic conditions to deteriorate. Of the total, 39.0 per cent expect conditions to remain the same. This resulted in an overall net percentage indicator (NPI) of 13.74 for the region, reflecting the overall positive business sentiment for the first half of 2013. Respondents also expressed optimism when they were asked about the economic climate within their sector.
Survey respondents in five of the ECCU member countries are optimistic about their prospects for the first half of 2013 with positive NPIs being recorded for Grenada (60.0), Montserrat (48.0), Antigua and Barbuda (47.62), St Kitts and Nevis (20.0), and St Vincent and the Grenadines (12.50); while businesses in Saint Lucia (-66.67), Dominica (-36.0), and Anguilla (-18.75), were generally pessimistic about their prospects.
Mixed sentiments | While general economic conditions are expected to improve, the sentiments expressed for the key indicators within sectors are mixed. In general, during the January to June 2013 period, businesses expect their sales performance to improve but their profits to deteriorate further relative to the first half of 2012. With respect to overall exports, businesses in six member countries expect an improvement in performance. St Vincent and the Grenadines, Anguilla, Grenada, Montserrat, St Kitts and Nevis and Saint Lucia are optimistic about their exporting prospects during the outlook period while businesses in Dominica expect exports to deteriorate. In Antigua and Barbuda businesses expect their exporting prospects to remain unchanged for the review period. Respondents indicated that they expect the cost of doing business in the ECCU to continue on an upward trajectory. With respect to construction activity performance, sentiments in Anguilla, Grenada, Montserrat and Saint Lucia are optimistic about the outlook period while businesses in Antigua and Barbuda and Dominica expect activity to remain unchanged for the review period. Businesses in St Vincent and the Grenadines expect construction activity to decline.
TRENDS IN BUSINESS SENTIMENTS & CREDIT | An analysis of business sentiments from January 2007 to June 2013 indicates that general business sentiments declined during the period 2007 to 2009, but have fluctuated thereafter. Positive sentiments were expressed for the January to June 2013 outlook period — the first time since January to June 2007.
The trend in sentiments expressed by respondents during the period from January to June 2007 to January to June 2013 reflects one of overall tightening in the terms and conditions for lending over the period with improvements seen in some periods. Sentiments were the lowest during the period July to December with an NPI -82.1 and although still negative, subsequently improved for three consecutive periods. Although the sentiments expressed are still one of overall tightening, an improvement has been seen for the last three survey periods i.e. January to June 2012 to January to June 2013.
The data was adopted from the ECCB.
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