Study: Jamaica and Barbados report lowest confidence gains in 2013
Confidence is low among Caribbean businesses, with only the largest companies reporting signs of an upward swing in prospects for the future, according to new research.
The Global Economic Conditions Survey from the Association of Chartered Certified Accountants and the Institute of Management Accountants IMA, which gauges the views of finance professionals across the world, indicates that the Caribbean’s business community had little to feel good about during the first quarter of 2013.
The global survey of 2,000 finance professionals working in businesses of all sizes showed that in the region just 23 per cent said they were more confident about the prospects of their organisations, while 31 per cent reported a loss of confidence.
Emmanouil Schizas, senior economic analyst at ACCA, said: “Globally, finance teams, who have their fingers on the pulse of business, have reported glimmers of hope for the future. The Caribbean region, however, while still reporting confidence gains, has a more subdued outlook.
“The Caribbean seems to be going through its own credit crunch with pressure on cash flow and new orders combining with a continued lack of growth capital. While there are some signs of hope amongst businesses, the situation remains volatile,” Mr. Schizas added.
Brenda Lee Tang, head of ACCA Caribbean, noted the variations in how finance professionals in the region reported business confidence with professionals in Jamaica and Barbados the least likely in the region to share in the buoyant global mood in early 2013.
“However, it is not all bad news,” Ms Tang said. “Business opportunities have generally been on an upward trajectory for the last year and a half, and grew strongly in early 2013. FX volatility and inflation have fallen for the last six months, after peaking in Q3 2012, while reported investment opportunities surged after falling for nine months straight. As a result, and although a good deal of dynamism was lost in Q1 2013, business capacity building has strengthened.”
The global outlook
The survey found that globally, nearly one quarter (24 per cent) of respondents reported they were more confident about the prospects of their organisations than three months earlier, up from 19 per cent in late 2012, while 37 per cent reported a loss of confidence, down from 43 per cent. The highest confidence levels were found in the Middle East.
More than two fifths (43 per cent) of respondents in early 2013 believed the global economy was improving or about to do so, up from 30 per cent in the previous quarter, while just over half (54 per cent) expected deterioration or stagnation, down from 65 per cent in late 2012.
“The global confidence gains recorded in Q1 2013 are much larger than what would be expected given the conditions on the ground,” Mr. Schizas noted. “It seems confidence is being fuelled by an expectation of economic improvement in the future, but it’s not clear, when looking at the fundamentals, where this is meant to come from. As a result, we believe this surge in confidence is likely to be short-lived.”