THE ECONOMY
MUTED OPTIMISM AMID CAUTION
Economic confidence improves modestly as caution continues to shape the outlook
Corporate confidence in the economy edged higher in July, supported by improved expectations in business circles regarding the months ahead. Nevertheless, sentiment remains measured as businesspeople continue to contend with rising costs and uncertainty surrounding the broader economic outlook.
THE ECONOMY The latest LMD-PEPPERCUBE Business Confidence Index (BCI) survey, conducted in the first week of July, points to a slight improvement in economic optimism.
More than a third (37%) of polled respondents expect the economy to ‘improve’ over the next 12 months, which is five percentage points higher than in June. And slightly over half (53%) believe conditions will ‘stay the same’ – up five points from the previous month.
A mere 10 percent believe that the economy will ‘get worse,’ representing a noteworthy 10 point decline from June.
SALES VOLUMES Expectations regarding sales volumes improved notably in July with 52 percent anticipating better prospects over the next 12 months compared to 40 percent in the month prior.
However, just over four in 10 (41%) respondents expect their sales volumes to ‘stay the same,’ reflecting an eight percentage point decline, while seven percent believe their sales volumes will ‘get worse’ – down four points from the preceding month.
Meanwhile, 40 percent report an ‘increase’ in sales volumes in the last 12 months, marking a nine percentage point hike compared to June.
And slightly under half (45%) say their sales volumes ‘stayed the same’ – down two points from June – while 15 percent report an increase (down 11 points from 26% in the preceding month).
Looking ahead to the next three months, the outlook appears to be somewhat positive with 40 percent of survey participants projecting an increase in sales volumes compared to June’s 35 percent.
Moreover, nearly half (49%) of the sample population expect their sales volumes to ‘stay the same’ (down 1%) while only 11 percent anticipate their numbers to ‘get worse’ over the next three months – that’s four percentage points lower than in the previous month.
INVESTMENT CLIMATE Confidence in the investment climate remained subdued in July with only two respondents viewing the outlook as ‘very good’ – versus none in June.
In the meantime, the proportion describing the outlook as ‘good’ is unchanged at 11 percent. And 53 percent say the investment climate is ‘fair’ – i.e. a three percentage point decrease from the month prior.
In contrast, over a third (34%) of respondents view the investment climate as ‘poor’ or ‘very poor,’ marking a one percentage point increase from the preceding month (33%).
EMPLOYMENT PROSPECTS Fifteen poll participants say they intend to ‘increase’ their staff numbers, representing a one percentage point decline from June.
And more than seven in 10 (73%) of those surveyed say they intend to maintain their current workforce levels – up five percentage points – while 12 percent expect to downsize over the next six months, which is four points lower than in June.
– LMD
