ECONOMIC SENTIMENT FLICKERS

There’s been yet another turnaround in how businesspeople view the economy

The tide appears to have shifted again with businesspeople turning more optimistic in May. PepperCube Consultants notes a more positive business outlook, explaining that growth is anticipated over the coming 12 months.

THE ECONOMY The latest LMD-PEPPERCUBE Business Confidence Index (BCI) survey, conducted in the first week of May, sees participants’ optimism about the economy ‘improving’ over the next 12 months, rising to 76 percent – that’s a 10 percentage point increase from April’s 66 percent.

And less than a quarter (17%) of respondents expect the economy to ‘stay the same,’ marking an eight point decline, while seven percent believe it will ‘get worse’ – down from nine percent in the month prior.

SALES VOLUMES The downward shift in salespeople’s sentiment continues for a third consecutive month with 74 percent of polled executives saying they expect an improvement in sales volumes over the next 12 months.

This represents a four point dip from April, extending the decline that began in February.

And 24 percent of survey participants believe their sales numbers will ‘stay the same,’ which represents a notable increase of 14 points from 10 percent in the preceding month.

Meanwhile, a third of respondents report an ‘increase’ in sales volumes compared to the previous month, which represents a six percent spike from the 60 percent recorded in April.

Additionally, 22 percent say their volumes ‘stayed the same,’ reflecting a three point increase from the previous month (19%). And 12 percent report a decline in sales volumes – a notable nine point decline from around a fifth (21%) a month ago.

Looking ahead, expectations of higher sales volumes over the next three months have dipped by two percentage points to 65 percent – down from 67 percent in April.

Thirty-one percent of the sample population believe their sales volumes will ‘stay the same,’ marking a moderate eight point uptick. And only four percent anticipate their numbers to ‘get worse’ over the next three months, which reflects a return to the sentiments expressed in the first three months of the year.

INVESTMENT CLIMATE Similarly, confidence in the investment climate has waned once again, reversing the slight uptick in April. The percentage of respondents who view the investment climate as favourable has fallen from seven to three percent in May.

Those viewing the outlook as ‘good’ has risen by six percentage points, to slightly over a third (34%). And 51 percent continue to believe the investment outlook is ‘fair,’ which is an increase of five percentage points from April’s 46 percent.

The proportion of respondents rating the outlook as ‘poor’ or ‘very poor’ has eased to a little over one in 10 (12%) compared to April’s 19 percent.

EMPLOYMENT PROSPECTS Forty-five percent of businesses say they plan to ‘increase’ their staff numbers – that’s an encouraging nine point rise from the month prior. Meanwhile, 46 percent intend to maintain the status quo, which is an eight point decline from the month prior.

Only nine percent say they may consider downsizing in the next six months.

– LMD