Economic optimism takes a dip -Survey

February, 6, 2020

Post – election economic positivity erodes as corporates adopt a wait and see mindset

The economy according to the latest LMD- Nielsen Business confidence index (BCI ) survey, the share of respondents who say the economy will improve in the coming 12-months has fallen to 62% in January from 74% in the previous month.

Commenting on the state of the economy, a corporate representative notes that “the economy climate in general looks favorable for business at present.”

Meanwhile 3 in 10 (up from only 16% in December) of those surveyed by Nielsen feel that the economy is likely to remain the same in the 12-months ahead whereas 8% expect conditions to worsen.

Reflecting this trend the share of respondents who are of the view that business will improve in the 12 months has dropped to two- thirds from the previous month’s 79%.

Similar sentiments are cited in regard to short term business prospects as well with 57% of those polled (compared to 70% in November) noting that sales volumes will improve in the next three months.

Whereas one survey participant opines that “the new government’s policies for business seem favorable,”

Another remarks: “we don’t expect business to grow further as there are government policies that impose restrictions on imports and exports.”

“People are spending to purchase goods and services. In the future too, we expect that this will continue to be the case after the general election,” says yet another corporate executive.

Meanwhile, views on the current investment climate in the country have remained more or less the same with 46% of those surveyed saying this is a good time to invest.

“Investments happening in the country will also benefit from new policies, “a respondent asserts.

However, another member of the biz community remarks that they “don’t expect much investment – especially foreign investment- because the government isn’t stable; it’s an interim government, so we have to wait and see until [after] the general election.”

Meanwhile a notable majority (69%) of those consulted by the pollsters plan to maintain their workforce in the next six months. Accordingly less than a quarter (versus 33% in December) have plan to increase their staff count while another 8% anticipates that cuts maybe on the cards in the six months ahead.