Curtin

Still riding the wave of optimism from last September's change of government, business confidence showed a mild uptick during this year's first quarter, although corporate Jamaica remained doubtful of a short-term take-off in the island's economy.

At the same time, consumer confidence fell back from last year's third quarter, but was still marginally higher than the first quarter of 2007, when Jamaicans were gearing for the poll that eventually ended the 18-year reign of the People's National Party.

The latest business and consumer confidence surveys, done quarterly for the Jamaica Chamber of Commerce's Conference Board, were released Tuesday, less than a week since Finance Minister Audley Shaw tabled a $497-billion budget.

Shaw will outline how he will finance the Budget as well as unveil his programme for stimulating the economy in a fortnight's time.

According to the survey, business confidence for the quarter rose 7.4 points, pushing the index to 117.2, from the 109.8 in the final quarter of 2007, but still below the 139.9 in the first quarter of last year.

Favourable expectations

Professor Richard Curtin of the Survey Research Center of the University of Michigan, who manages the surveys on behalf of the Jamaica Chamber of Commerce, reported that the entire gain in the business-confidence index was due to more favourable expectations for future economic conditions, the index for which rose 13.2 points, to 112.7 in the first quarter.

"Two thirds of the business firms that anticipated improved economic conditions attributed those expected gains to changes in economic policies of the new government," Curtin reported.

"There were nonetheless sub-stantial concerns expressed by firms about the economic outlook, including high oil prices, commodities and other imported goods."

But even with this, as well as a softening of investment plans, 61 per cent of surveyed businesses expect improved profits in the first quarter as well as an overall strengthening of their financial conditions.

And while world economic conditions remain sticky, Jamaicans are relatively confident in the policies of the new administration.

They see prospects for new jobs but were guarded on the level of growth. They also anticipate that their standard of living would improve.

Consequently, the index of consumer confidence slipped a marginal 5.3 points to 142.4, but was still above the 139.9 in the first quarter of 2007.

"Current conditions were judged at near-record favourable levels, with more than three fourths of all Jamaicans reporting that the performance of the economy was on average or better in the first quarter of the survey," Curtin reported.

Still, consumers have signalled that they will not be so willing to part with disposable income, "indicating an underlying uncertainty about future economic prospects," the survey report said.

richard.deane@gleanerjm.com