Business confidence dips to seven-month low

Monday, 29 September 2014 00:53 - - {{hitsCtrl.values.hits}}

LMD reports that exclusive gauge of biz confidence is under pressure

“The barometer of business sentiment has fallen slightly for the second month in a row, on account of both economic and political worries, in the run-up to the budget proposals,” says business magazine LMD, in its forthcoming October edition. It adds: “The latest LMD-Nielsen Business Confidence Index (BCI) survey suggests that businesspeople could be harbouring a plethora of concerns. For instance, they appear visibly distressed over the prevailing political culture, especially since the recently-held Uva Provincial Council elections was more a display of a breakdown in law and order than meaningful political manifestos.”

The BCI shed four basis points, to 132 (to below its 12-month average of 135), on the back of a slight increase in concerns about future prospects for business. Nielsen’s Managing Director Shaheen Cader explains that “some businesses have attributed this fall to their belief that consumers are continuing to cut down on spending.” A spokesman for LMD says that “the survey reveals a number of grievances on the part of corporates – they include the violence and disorder that precedes local elections, the emergence of communal tensions and shrinking disposable incomes.” Quoting from the magazine, he adds: “Business sentiment in the coming months is likely to revolve around the Government’s fiscal policy deliberations, on account of the forthcoming Budget 2015 and the resulting future direction of the economy.” “The substantial reduction in electricity rates and fuel prices could boost sentiment in the short term. But the prospect of elections next year will keep us all on our toes, so the betting is on that familiar wait-and-see mindset,” he adds. LMD’s publisher, Media Services, says that magazine will be released to bookstores and supermarkets on Friday 3 October.