THE ECONOMY

OPTIMISM LACKS CONVICTION

Economic sentiment shores up but uncertainty continues to temper optimism

Corporate sentiment remained subdued in September despite a growing proportion of executives expressing optimism about our economic prospects. 

But with almost half of the surveyed respondents expecting the environment to remain unchanged, escalating costs and uncertainty about the wider economic milieu continues to temper expectations.

THE ECONOMY The latest LMD-PEPPERCUBE Business Confidence Index (BCI) survey, conducted in the first week of September, reveals little change in economic optimism.

Slightly under half (47%) of polled respondents expect the economy to ‘improve’ over the next 12 months – that’s up six percentage points from August. 

Likewise, nearly half (49%) believe conditions will ‘stay the same,’ reflecting a one percentage point decline from the previous month. 

And only a meagre four percent expect the economy to ‘get worse’ – down five points from August’s nine.

SALES VOLUMES Sales expectations remained steady in September with half (50%) of the survey participants anticipating an improvement over the next 12 months – unchanged from the preceding month. 

Meanwhile, 45 percent expect their sales volumes to ‘stay the same’ – up seven percentage points from August (38%) – while a mere five percent believe their sales volumes will ‘get worse,’ reflecting a seven point decline from the month prior (12%). 

Over the past 12 months, 41 percent report an ‘increase’ in sales volumes, marking a two percentage point increase compared to 39 percent in August. 

Another 42 percent say their sales volumes ‘stayed the same’ – up four points from August (38%) – while less than a fifth (17%) report a decline, down six points from 23 percent in the preceding month.

Looking ahead to the next three months, the outlook has strengthened marginally with 45 percent of poll participants expecting higher sales volumes compared with 41 percent in August.

Moreover, half (50%) of the sample population anticipate their sales volumes to ‘stay the same’ (up 3%) while a mere five percent expect their numbers to ‘get worse’ over the next three months – down seven percentage points from the previous month (12%). 

INVESTMENT CLIMATE Confidence in the investment climate improved in September with a sole respondent rating conditions as ‘very good’ – compared with none in August. 

Meanwhile, 24 percent describe the outlook as ‘good’ while 65 percent consider the investment climate to be ‘fair’ – down two percentage points from the month prior (67%). 

A further 10 percent of respondents view the investment climate as ‘poor’ or ‘very poor,’ marking a 12 point decline from the preceding month (22%).

EMPLOYMENT PROSPECTS Around one in five (21%) of respondents say they intend to ‘increase’ their staff numbers – representing a one percentage point increase compared to August. 

And nearly three-quarters (72%) of those surveyed say they intend to maintain their current workforce levels – up five percentage points – while seven percent expect to downsize over the next six months, which is six points less than in the preceding month. 

– LMD