Biz confidence continues to head north

Friday, 7 October 2016 00:26 - - {{hitsCtrl.values.hits}}

The soon-to-be-released October edition of leading business magazine LMD reports that business confidence has spiked by 24 basis points, to reach 150. As the magazine points out, the LMD-Nielsen Business Confidence Index (BCI) has moved in a northerly direction, to settle at above its average (146) for the last 12 months.

“The reversal [at the time of the survey] of the proposed increase in VAT and revival of large infrastructure projects seem to have done the trick… Businesses felt, at the time, that these steps will help improve the economy… and help attract more investment,” says Nielsen’s Managing Director Sharang Pant, in LMD.

However, he also notes that “inflation and increasing interest rates remain concerns, but business leaders feel that more transparency and communication from the Government, regarding its intentions, will create a positive environment.”

The exclusive monthly survey reveals that businesspeople appear to be optimistic about Sri Lanka’s economic prospects, with nearly 40% of respondents expecting the economy to improve in the coming 12 months. And as many say conditions will “stay the same” and 21% have a negative outlook.

Where business prospects are concerned, LMD states that “62% (versus 53%, in the prior month) of those polled say their companies’ business will improve in the next 12 months. Notably, less than 10% of the survey sample expects sales volumes to deteriorate over this period, whereas almost three-in-10 foresee the status quo being maintained.”

Looking ahead, a spokesperson for LMD states that “the latest BCI reflects the sentiment gauged in the first seven days of September, so this didn’t reflect the VAT amendments announced a week later.”

“This new tax burden – along with the prospect of Budget 2017 looming on the horizon - is likely to have an impact on business confidence, going forward,” the magazine notes.

Its publisher Media Services says the October edition of the magazine will be released to bookstores and supermarkets on Friday, 7 October (for the full BCI report, go to www.LMD.lk).