After seven years of improvements in consumer outlook, the Jamaica Chamber of Commerce (JCC) informed public and private sector representatives at the AC Marriot Hotel in Kingston last Tuesday, October 15, that the consumer confidence index declined for the first time in as many years.
“For the first time in seven years, consumer optimism recorded a slight decline of 3.5 points, with an index of 179.9 points for the third quarter,” a post-event release JCC stated. “The dip is associated with consumers’ current realistic perception of business conditions and their expectations for jobs in the future.”
Consumers’ expectations of current economic conditions also waned marginally by two points, moving from 222.8 in the second quarter of 2019 to 220.8 points in the period July – September. For the current period, which includes Christmas, 66 per cent of consumers indicated they had no plans for the Yuletide season.
On the business side, the JCC reported that firms had lowered their expectations during the third quarter.
“Business optimism also recorded a significant decline of 9.5 point, recording an index of 141.2 points from the second quarter’s index of 150.7, mirroring the third quarter’s index of 2018. Despite this decline, businesses remain positive that their financial position will change,” the release stated.
Business expectation of firms’ financial standing has also declined since the January – March period, moving from 169 points to 175 points in the second quarter, then down to 165 points for the July to September period
“…The looming conversation in the international arena on the possible slowdown in the world economy will put people on a review basis…”— Jamaica Chamber of Commerce Immediate Past President Larry Watson
However, JCC Past President Larry Watson argued that “The trajectory of the Business & Consumer Confidence is on the incline, even though we have had a slight dip. The trend analysis will show that it is improvement; it is still at the highest level and whereas a slight dip exists this is just a temporary reduction based on the current conditions. But I think we will see the trajectory continue in a positive mode.”
He noted, too, that the international events could also be contributing to the results of Business Confidence Index. Current trade talks between the US and China and a pending Brexit deal have been dominating the headlines of global business and financial news outlets, while also factoring into the decision of investors.
“…The looming conversation in the international arena on the possible slowdown in the world economy will put people on a review basis; I wouldn’t go as far as saying pause, but certainly on a review basis looking ahead, because our economy is so dependent on the international arena and our growth agenda has to be stimulated by exports,” Watson told the gathering.
Firms that expected the Jamaican economy to improve fell from 76 per cent in between April and June to 54 per cent, while those expecting it to worsen moved from four per cent to 15 per cent. This impacted the economic index for business which experienced a sharp decline from 172 points in the second quarter to 139 points.
Nevertheless, National Commercial Bank Matilda’s Corner Branch Manager Dave Wilson encouraged business owners to remain optimistic. He pointed out that “irrespective of the external factors…business leaders have no choice but to be creative and indigenous to find new ways to stay on top and drive additional revenues, which result in additional profitability”.
Wilson, however, highlighted optimism within the tourism and hospitality, retail and wholesale, and construction industries, stating: “…those sectors and those markets continue to believe that there is positivity and opportunity and growth in these sectors.”