JAMAICANS are expressing increased satisfaction with their lives, despite job prospects nearing record lows, according to the Confidence Index released Wednesday.
Overall, consumer and business confidence for the third quarter 2014 dipped slightly to 97.8 and 112.1 points from 100.8 and 112.8 points respectively three months earlier. Confidence, however, remains much higher than 12 months earlier for both indices.
The rise in satisfaction comes from a general view that the economic policies of the Government, directed by the International Monetary Fund (IMF), are warranted.
“Of particular importance, when asked about their satisfaction with the quality of their lives, Jamaicans voiced substantial gains in the recent survey, rising to the highest levels in two years. These gains represent a significant degree of acceptance and accommodation of recent changes in economic policies, despite the accompanying rise in their reports of hardships,” said a survey conducted by Market Research Services, a Kingston-based company headed by pollster Don Anderson.
The study was developed in co-operation with the Surveys of Consumers Department at the Survey Research Centre, University of Michigan, and published through the Jamaica Chamber of Commerce Conference Board.
However, despite increased satisfaction, people still feel that it’s hard to get a job. In fact, the number of people with an optimistic view of job prospects actually dropped to the lowest levels recorded since the survey began in 2001.
“There was a near unanimous opinion among consumers that jobs were currently in short supply, a view held by just over nine-in-10 Jamaicans. Less than 1.0 per cent thought that jobs were plentiful, an all-time record low,” stated the report.
The Consumer Confidence Index, however, is well above the 10-year low of 86.7 points recorded in last year’s third quarter. The reason was that consumers recognised that the economy had begun to improve, although the gains reported by consumers are thus far quite small.
“Devaluation, stagnant salaries, scarce job opportunities, higher taxes, and rising prices continued to be the common complaints of consumers,” stated the report.
Turning to business confidence, the index grew higher during the first three quarters of 2014 than in any other year since 2007.
“Business firms clearly think the new economic policies of the Government are having a favourable impact,” it stated.
Roughly, one-third of business respondents expect the economy to improve, compared with 19 per cent a year earlier. The overall improvement during the past year was the largest recorded during the past decade.
“When asked to explain their improved views on the economy, nearly half of all firms reported that their optimism was linked to favourable assessments of the impact from the adopted government and IMF policies,” stated the report.
In fact, roughly half of all firms in the third quarter 2014 survey reported that it was now a good time to invest to increase capacity.
“These robust investment plans for new plants and equipment represent a substantial vote of confidence by business firms in the future state of the Jamaican economy. Importantly, this sense of renewed confidence in the outlook for the Jamaican economy has not been altered by the unexpected slower pace of past economic gains,” stated the report.
In May 2013, Jamaica entered into its most recent loan agreement approved by the IMF that would result in the island securing nearly US$2 billion in loans over four years from the IMF, World Bank and the Inter-American Development Bank under an Extended Fund Facility.
Since the IMF agreement, the local currency lost some 20 per cent of its value against its US counterpart. It resulted in some businesses shifting to exports to fuel growth while others imported less.
“Importantly, the data confirm an ongoing adaptation of firms to increase their exports as well as to produce more products domestically to effectively reduce imports. Significant economic reform is not a sprint, but needs the skills of long-distance runners,” stated the report.
– Steven Jackson
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Quality of life confidence up, survey shows
Sean Mathurin -coordinator OECS Labour Market Information Systems programme