Consumer hope over jobs is building

BY KARENA BENNETT
Business reporter
benettk@jamaicaobserver.com

Wednesday, October 11, 2017

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Jamaica has recorded an all-time high with consumers describing the current availability of jobs as adequate or plentiful, according to a recent business and consumer confidence survey.

Consumer confidence in Jamaica, which has been more favourable for a longer period than at any time since the survey began in 2001, saw a slight increase in index of 151.1 in the third quarter of 2017, slightly above the 149.3 in the 2nd quarter of 2017.

The index is also nearly identical with last year's 151.6.

According to pollster Don Anderson, the confidence index over the past seven quarters has averaged 149.4. He added that consumers gave credit to the government's economic policies, and increasingly to the actual expansion of business and job opportunities sparked by those policies.

Future job outlook also improved to 36 per cent, predicting more new jobs in the year ahead, up from last quarter's 32 per cent.

“Today, consumers are placing hope in the realisation of jobs. Where is this hope coming from? It is not coincidental that today we are trying to dig more deeply into what is happening in the construction sector.

“When the data is analysed very carefully, there is a significant amount of construction activity over the last year and there were announcements recently of more construction activities to take place, and what this is doing of course is absorbing a significant amount of the unskilled labour and we know the unskilled labour equates largely to the low socio-economic group primarily. Therefore, it would take no rocket science to appreciate that we find that people in the low socio-economic group are becoming more confident about what's happening,” Anderson noted.

He reasoned that Jamaica's high level of confidence translates that there is a fair degree of acceptance and confidence in the government's policies, particularly as it relates to declines in consumer and business optimism before and after an election.

“There were huge peaks which we are not now seeing and we are suggesting that there is a fair amount of stability which people are now recognising and buying into,” Anderson said.

Consequently, consumers' home-buying plans rose to 11 per cent for the third quarter, slightly ahead of last quarter's two-year low of eight per cent, but remained below last year's 16 per cent.

Vehicle-buying intentions of consumers also posted a small increase to 18 per cent from last quarter's 16 per cent, although they remained below last year's 22 per cent.

Vacation intentions at 36 per cent were between last quarter's 35 per cent and last year's 43 per cent. Overall, consumers' spending remained quite cautious, improving only slightly over last quarter.

“To be sure, some still complain that the gains have not come fast enough or have not sufficiently extended to the entire population. Perhaps the most telling sign of the success of the policies has been the persistent confidence voiced by consumers over nearly the past two years. Importantly, these positive motivations have effectively aided the government's economic policies by making additional economic gains more likely outcomes,” the report read.

While consumer confidence showed improvements, the business confidence index stood at 135.2 in the 3rd quarter of 2017, slightly below last quarter's 137.1 and last year's 139.2.

According to the report, the decline over the past seven quarters has totalled just 9.4 index points from the all-time peak of 144.6 set in the first quarter of 2016.

“The slippage did not indicate a loss in confidence in the government's policies as much as an initial overestimate of the pace of the resulting economic improvement. Importantly, the data indicated the start of shift in emphasis from a primary focus on the growth potential of the new economic policies to firms increasing their emphasis on actual economic gains. This is a most welcome sign of the policy's success,” it read.

Anderson noted that Jamaica's problem of crime and violence, however, has again become a critical concern, reported by nearly three-in-four firms, up from one-in-two last quarter. He added that the greater emphasis on crime and violence as the main problem facing the country may partly reflect the improvement in economic conditions.

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