ECONOMIC OPTIMISM SHORES UP

The optimistic outlook prevails as confidence strengthens amid positive trends

Confidence about the economy is growing in corporate circles, buoyed by the rise of the LMD-PEPPERCUBE Business Confidence Index (BCI).

According to PepperCube Consultants, the improved trajectory demonstrates growing optimism within the corporate sector against a backdrop of macroeconomic stability.

It notes that the BCI’s ongoing gains reflect the resilience of the business community and its faith in the economic reform programme.

THE ECONOMY In the first week of January, 58 percent of BCI survey participants expressed confidence about the economy ‘improving’ over the next 12 months, which is a 17 point increase from December.

It is noteworthy that only eight percent viewed the economy with optimism ahead of the presidential election in September.

Meanwhile, 37 percent of respondents believe the economy will ‘stay the same’ (a 20% fall) while only five percent anticipate it will ‘get worse’ – from two percent in the month prior.

SALES VOLUMES There’s been a noteworthy shift in sentiment among salespeople in January with a large majority of executives – 70 percent – saying they expect an improvement in their volumes over the next 12 months. This reflects a 17 percent increase from December’s outcome.

In the meantime, 29 percent expect their sales numbers to ‘stay the same,’ which represents a 16 point drop from 45 percent in the preceding month.

Forty-three percent of respondents report an ‘increase’ in volumes compared to the previous month, which is a slight decline of four percent from December’s 47 percent.

Additionally, 51 percent of survey participants say their sales volumes ‘stayed the same,’ reflecting a notable 14 point increase from the previous month (37%). And a mere six percent report lower sales volumes (down from 16% a month ago).

Looking ahead, expectations of higher sales volumes over the next three months have climbed by six percentage points (to 51%) – up from 45 percent in December.

Meanwhile, 44 percent of respondents believe their sales volumes will ‘stay the same,’ representing an eight point fall. Only five percent expect their numbers to ‘get worse’ over the next three months (a 2% spike compared to the prior month).

INVESTMENT CLIMATE The investment climate continues to improve with positive indicators for the fourth consecutive month in January.

Twenty-seven percent now rate Sri Lanka’s investment prospects as ‘very good’ – up from 13 percent in the previous month. The percentage that view the outlook as ‘good’ has dropped by four points to 36 percent.

And 29 percent believe the investment climate is ‘fair,’ reflecting a 10 point drop from 39 percent in December.

Those rating the outlook as ‘poor’ or ‘very poor’ make up eight percent (up one percentage point from December’s 7%).

EMPLOYMENT PROSPECTS A notable 47 percent of businesses say they plan to ‘increase’ their staff numbers while half (50%) intend to maintain their current workforce – a decrease from 67 percent in the month prior.

Only three percent say they may consider downsizing their staff within the next six months.

– LMD