Business confidence in the second quarter has recovered from its all-time low, but though up by 22 per cent over the first quarter is still at its third-lowest point in the past two years of the survey, at 92.7 points.

Confidence among consumers, whose outlook is generally far rosier than Jamaican firms' - falling below 100 just once in the past two years - was up 10 per cent over the first quarter at 105.3 points.

Still, buried within the numbers was some level of concern about their prospects, following thousands of jobs lost in the prevailing recession that has gripped Jamaica.

Confidence is down 17 per cent year on year, according to analyst Professor Richard Curtin.

For businesses, confidence levels have fallen eight per cent in a year.

"They think that the worst is over," said Curtin of business firms.

"Whether this a plausible turning point, I have my opinion on that; but the data is silent on the issue of course."

The survey results come amid reports of a close to flat performance of the stock market - capitalisation is at $600 billion - and the stabilisation of the foreign market with the central bank holding the Jamaican currency steady at about J$89 to the USD.

Curtin said the outlook of firms represented a significant "psychological shift" in that they no longer compared their current situation with prior peak, but with the recent lows, which he said typically results in a more favourable assessment than would otherwise be expected.

The Index of Business Confidence fell to a record low of 75.8 at the top of the year when companies were still cutting jobs to cut cost.

More firms are optimistic

Now, though 42 per cent of companies said their profits were lower than expected, more firms are optimistic that the economy will stabilise at current levels.

Still a substantial block of them, 47 per cent, expect the economy to worsen but that is down from 55 per cent in the previous period.

Curtin said the survey also showed that firms were more optimistic about opportunities to invest in the expansion of their business, rising from 27 per cent to 30 per cent, but were still concerned about weakened credit markets and ongoing recession globally that continues to limit trade.

The quarterly uptick in consumer confidence, Curtin said, was due mainly to the widespread perception that the worst of the economic downturn may be over.

He said a mere six per cent judged current economic conditions favourably in the second quarter but nearly four times as many, 23 per cent, expect the overall economy to improve during the year ahead.

He said while consumers thought that the free fall may have ended, 46 per cent still anticipated worsening economic conditions ahead.

"They see hope on the horizon but that does not include them," Curtin pointed out.

National output decline

Government is projecting for a further three per cent decline in national output this year, with expectations that the decline could be as deep as five per cent of GDP.

The surveys of business and consumer confidence are conducted quarterly by Don Anderson, and the data is analysed by Professor Curtin of the University of Michigan on behalf of the Jamaica Conference Board, the research arm of the Jamaica Chamber of Commerce,

Of the 600 consumers surveyed this quarter, 89 per cent reported that jobs were scarce and remained as bleak as the start of the year.

Consumers were expecting that there would be no income increase. Gains were expected by 35 per cent of consumers, plunging from 52 per cent, said Curtin.

Turning to remittances, Curtin said while the number of Jamaican households that received remittance has remained unchanged at 38 per cent in the last survey, the dollar amounts have been progressively reduced.

He said smaller remittances were reported by 41 per cent in 2009, up from 30 per cent in 2008 and just 17 per cent in 2007.

dionne.rose@gleanerjm.com

Now, though 42 per cent of companies said their profits were lower than expected, more firms are optimistic that the economy will stabilise at current levels.