Dennise Williams, Staff Reporter
JAMAICAN BUSINESSES and consumers are both showing high levels of confidence in the future, said Professor Richard Curtin, head of the Survey Research Centre at the University of Michigan, yesterday.
This confidence is underpinned by improved outlook for the economy this year he said. He was outlining the results of the first quarter Business and Consumer Confidence Indices at the Terra Nova Hotel.
"Confidence is at a five-year high," he said. "Right now, the data indicate that Gross Domestic Product growth will be higher this year than at any time over the last decade."
"Part of consumers' confidence is based on political expectations," professor Curtin revealed. Fieldwork for the survey took place during the course of the campaign for the election of a new president of the ruling People's National Party from January to March. "This is an important factor that drove up optimism," he added.
About 85 per cent of consumers think jobs are in short supply. "Their current optimism is not based on the situation now but on their future outlook."
Consumers might have been feeling a bit giddy during the first quarter of the year, the business outlook, although still optimistic, was more reserved.
"Jamaican businesses don't expect profitability to soar," he said. "This is reflected in the performance of your stock exchange. These tempered expectations say that businesses do not expect the first quarter profits to be sustained. So businesses have a realistic view of the economy."
CONFIDENCE FACTORS
Business confidence rose by 12 per cent, due to more favourable expectations of economic growth during the year ahead. Within the business sector, 33 per cent expected the economy to improve during the year ahead while 25 per cent expected worsening economic conditions.
Overall, 48 per cent of all consumers anticipated higher incomes during the year, which is the highest level ever recorded. Additionally, 60 per cent of all families expected their overall standard of living to improve during the year ahead.
Accordingly, the spending plans of consumers have also gone up. Home buying plans were being considered by 18 per cent of Jamaicans in the first quarter, which is twice the number in the same period in 2005.
Vehicle purchases were planned by 27 per cent by Jamaicans, up from 14 per cent a year ago. And vacations were recorded by 34 per cent of Jamaicans, up from 25 per cent a year ago.
The indices are sponsored by the Jamaica Chamber of Commerce's Conference Board in partnership with NCB Capital Markets Ltd.
