THE ECONOMY
MUTED CORPORATE OUTLOOK
Confidence dips further as economic optimism comes under scrutiny once again
Economic sentiment dipped in November compared to the previous month, as many of the same concerns continue to weigh on the corporate community. While businesses remain cautiously optimistic, economic confidence shows little sign of improvement, constrained as it is by persistent uncertainties and a slow recovery.
THE ECONOMY The latest LMD-PEPPERCUBE Business Confidence Index (BCI) survey, conducted in the first week of November, reveals that economic optimism has waned despite a somewhat positive outlook.
Two-thirds (67%) of respondents believe the economy will ‘improve’ over the next 12 months, reflecting a seven point decline from October. And nearly three in 10 (29%) expect the economy to ‘stay the same’ – that’s a six point spike from the previous month. And only four percent anticipate it will ‘get worse’ (up 1% from October).
SALES VOLUMES Expectations surrounding sales volumes have also softened, though they’ve remained relatively steady since July. Seventy-four percent of polled executives anticipate an improvement over the next 12 months.
And 23 percent of executives polled by PepperCube Consultants say their sales numbers will ‘stay the same,’ which is an eight point rise from the previous month. And only three of the 100 respondents surveyed foresee sales volumes to ‘get worse,’ down one point from October.
Sixty-three percent of respondents report an ‘increase’ in sales volumes – unchanged from the previous month.
Additionally, 27 percent reveal that their volumes ‘stayed the same’ (up three points from the preceding month’s 24%). And 10 percent report a decline, marking a three point drop from the 13 percent recorded a month ago.
Looking ahead, expectations of higher sales volumes over the next three months have weakened with two-thirds (67%) of respondents projecting an increase – that’s a notable seven point decline from 74 percent in October.
And over a quarter (28%) of the sample population believe their sales volumes will ‘stay the same’ (up 3% from the previous month) and five percent anticipate their numbers will ‘get worse’ over the next three months, representing a four percentage point increase from the month prior.
INVESTMENT CLIMATE Confidence in the investment climate reflects an unexpected improvement in November with 12 percent viewing the outlook as ‘very good’ – compared to October’s seven percent.
Those viewing the future as ‘good’ also rose by 13 percentage points to nearly four in 10 (38%). And 43 percent view the investment outlook as ‘fair,’ marking an 11 percentage point decline from 54 percent in October.
Meanwhile, only seven percent of poll participants perceive the investment climate as being ‘poor’ or ‘very poor,’ marking a notable improvement from 12 percent in the preceding month.
EMPLOYMENT PROSPECTS Half of the respondents (50%) say they plan to ‘increase’ staff numbers, which is a 10 point rise from October.
And 45 percent say they intend to maintain the status quo (down four points) while only five percent expect to downsize in the next six months.
