CORPORATE HOPES STAY PUT

The sense of optimism sparked by the presidential election outcome remains

Confidence in corporate circles remains largely unchanged following the presidential election, signalling a modest shift in economic sentiment under the new caretaker government at the time of the latest monthly LMD-PEPPERCUBE Business Confidence Index (BCI) survey.

According to PepperCube Consultants, businesses anticipate sustained stability in the short term with greater optimism in regard to economic and business performance in the longer term.

THE ECONOMY In the first week of November, 41 percent of survey participants expressed optimism about the economy ‘improving’ over the next 12 months, maintaining the same level as in October.

Meanwhile, over half the respondents (56%) believe the economy will ‘stay the same,’ marking a six percent uptick. On the other hand, three percent expect the economy to ‘get worse,’ which is a decrease of six percentage points from the preceding month.

SALES VOLUMES The shift in sentiment among salespeople witnessed in October has held steady, as their concerns about the economic outlook remain subdued.

The latest poll reveals that 46 percent of executives anticipate an improvement in their sales volumes over the next 12 months, which is consistent with October’s results.

And 51 percent expect their sales numbers to ‘stay the same,’ marking a six point rise from 45 percent in October. Additionally, only three percent foresee their sales volumes to ‘get worse’ – down from nine percent.

Twenty-six percent report an ‘increase’ in sales volumes compared to last month, down from 30 percent (a 4% decrease).

Additionally, 60 percent of respondents say their numbers ‘stayed the same,’ reflecting a notable hike of 13 points from the previous month (47%). And 14 percent report lower sales volumes (down from 23% a month ago).

Looking ahead, expectations of higher sales volumes over the next three months slipped slightly to 34 percent – versus 40 percent in October.

Meanwhile, nearly six in 10 (58%) respondents believe their sales volumes will ‘stay the same,’ which represents an eight percentage point increase. And less than one in 10 (8%) expect their numbers to ‘get worse’ over the next three months (a 2% drop compared to October).

INVESTMENT CLIMATE The investment climate appears to be on the upswing, reflecting positive indicators for the second consecutive month in November.

Eleven percent now rate Sri Lanka’s investment prospects as ‘very good’ – up from five percent in the preceding month. However, the proportion of participants that view the outlook as ‘good’ declined by nine points to 58 percent.

Twenty-eight percent believe the investment climate is ‘fair,’ which is a two point increase from 26 percent in October. And those rating the outlook as ‘poor’ or ‘very poor’ stand at nine percent (up two percentage points from October’s 7%).

EMPLOYMENT PROSPECTS A notable 23 percent of businesses plan to ‘increase’ their staff numbers while in contrast, a vast majority (76%) intend to maintain their current workforce – an increase from 72 percent in the previous month.

And only one percent (6% in October) say they may consider downsizing within the next six months.

– LMD