Business confidence edges down ahead of elections

Business magazine LMD reports that “biz sentiment has been dampened by ongoing uncertainties in the political sphere,” adding that that LMD-Nielsen Business Confidence Index (BCI) “reverses the relatively minor gain in the prior month, dropping by five basis points (to 154) in July.”

LMD continues: “While the latest count reflects the stagnation in the index for much of this year, it remains above both the 12-month (151) and all-time (129) averages. 

And as far as comparisons go, the index stood at 142 points before the January presidential election, and skyrocketed to an all-time high of 194, in the immediate aftermath of Maithripala Sirisena’s victory.”   

The magazine quotes Nielsen’s Managing Director Shaheen Cader, who says that “despite continued optimism about the long-term business and economic climate, and strong business earnings, the BCI has declined marginally.” 

“This marginal decline is driven by falling optimism on the investment climate, as a result of uncertainty due to the general elections,” Cader explains:

A spokesman for LMD explains: “A key issue highlighted in the latest BCI poll is the significant uncertainty regarding the political situation in the country, as well as the potential impact on business, going forward.”

“As last month’s edition of LMD pointed out, the index remains vulnerable to shifts taking place on the political front, and this is evidenced by the responses to the latest survey. So one feels it is a case of the outcome of parliamentary elections determining the future direction of business confidence,” he adds.

Media Services, LMD’s publisher, says that the magazine will be released to bookstores and supermarkets by Friday 7 August (for the full BCI report, go to www.LMD.lk).