Biz confidence plummets in February

Monday, 3 March 2014 02:05 - - {{hitsCtrl.values.hits}}

“Business confidence falters yet again, amid concern over shrinking consumer purchasing power and its adverse impact on business volumes and profits,” pioneering business magazine LMD says, in its March edition. “Free falling by 15 basis points to 124 in February, the latest LMD-Nielsen Business Confidence Index (BCI) has dropped to below its 12-month and all-time averages,” it explains.

The journal quotes Nielsen’s Managing Director Shaheen Cader, who says that this is due to a “less optimistic outlook, rather than an increase in negative outlook”. A spokesperson for LMD’s publisher Media Services, speaking exclusively to the Daily FT, adds: “This represents the sharpest decline in the index since February last year. On the contrary, the BCI is 26 points below where it was a year ago.” Meanwhile, Cader points out that “while perceptions towards economic growth remained the same as in December, lower optimism seems to be the result of lower than expected business volumes in January sales or in the latest company quarterly financial results”. LMD says that the corporate community seems slightly less enthused by the economy’s standing, with only 34 percent (versus 36% in January) stating that conditions are likely to improve in the next 12 months. As for the investment climate, however, around a third (compared to 38% in the prior month) of those consulted by the Nielsen remain optimistic – 43% say the conditions are ‘fair,’ while a quarter feel that we are facing headwinds, LMD notes. As for the BCI’s future direction, the magazine concludes: “It is likely that what transpires at the UN, in Geneva, over Sri Lanka’s human rights track record will play a part in how businesspeople perceive the country’s prospects… and thus, theirs.” Media Services says that the March issue of LMD will be released to bookstores and supermarkets across the island on Friday 7 March.