THE ECONOMY
SUBTLE SHIFTS IN SENTIMENT
Corporate sentiment about the economy remains firm amid mixed indicators
Concerns raised by the business community in July carried over into August with overall sentiment showing little sign of change – albeit that the underlying indicators remain mixed.
THE ECONOMY The latest LMD-PEPPERCUBE Business Confidence Index (BCI) survey, conducted in the first week of August, points to the slightest of upticks in optimism about the economy.
A notable 71 percent of respondents believe the economy will ‘improve’ over the next 12 months – a marginal increase of one percentage point from July’s 70 percent.
And nearly a quarter (24%) expect the economy to ‘stay the same,’ up three points from the previous month, while only five percent anticipate it will ‘get worse’ (down four percentage points from July).
SALES VOLUMES Salespeople’s expectations turned positive in August, reversing the blip recorded in July. Eighty-one percent of polled executives now expect an improvement in sales volumes over the next 12 months – a three point uptick from July (78%).
And 15 percent of survey participants believe their sales numbers will ‘stay the same,’ down one point from the previous month. Four of the 100 respondents surveyed expect their sales volumes to ‘get worse’ – that’s a two point decline from the previous month.
However, the proportion reporting an ‘increase’ in sales volumes compared to the month prior dipped marginally to 70 percent (from 71% in July).
Additionally, 15 percent say their volumes ‘stayed the same,’ reflecting a two point decrease from the preceding month (17%) while a similar proportion report a decline – a three point rise from 12 percent a month ago.
Looking ahead, expectations of higher sales volumes over the next three months have eased with 73 percent of respondents projecting an increase – a notable seven percentage point drop from eight in 10 (80%) in July.
Twenty percent of the sample population believe their sales volumes will ‘stay the same’ (up six points from the previous month) and seven percent anticipate their numbers to ‘get worse’ over the next three months, reflecting an increase of one percentage point.
INVESTMENT CLIMATE Confidence in the investment climate weakened in August with only two percent viewing the outlook as ‘very good’ – down three percent from July (5%).
Those viewing the future as ‘good’ dropped sharply – down seven percentage points to just over a quarter (26%).
In contrast, 59 percent believe that the investment outlook is ‘fair,’ reflecting an eight percentage point increase from July’s 51 percent.
Meanwhile, the share of poll participants who consider the investment climate as being ‘poor’ or ‘very poor’ edged up to 13 percent (up from 11% in the preceding month).
EMPLOYMENT PROSPECTS Forty-one percent of businesses say they plan to ‘increase’ staff numbers – that’s a three point fall compared to July.
In the meantime, 52 percent say they intend to maintain the status quo, which marks a one point rise. And only seven percent may consider downsizing in the next six months, suggesting a stable employment outlook.
