Business confidence continues to pick up, pushing past its last-quarter recovery with entrepreneurs pegging their hopes on signs of recovery in the United States, which the surveyors say might constitute an over-optimistic outlook.

But for consumers, wracked by job losses, salary freeze or pay cuts, and dwindling remittances, the future continues to appear bleak.

The quarterly survey by academics of the University of Michigan on behalf of the Jamaica Conference Board has found that in the third quarter this year, business confidence climbed more than eight percentage points from 92.7 in the last, to 101.0, erasing the decline recorded in the past year and registering an overall improvement of 25.2 points from its all-time low of 75.8 six months ago.

Confidence among consumers

Meanwhile, confidence among consumers remained flat at 105.5, almost exactly the 105.3 recorded in the previous quarter.

Professor Richard Curtin, head of the Survey Research Centre at the University of Michigan, in presenting the findings in Kingston Tuesday, said firms were more positive about the financial outlook for both their business and the economy.

"One of the things I have seen in the business data is that they expect the US economy (to) stabilise," Curtin said at a press conference at the Terra Nova Hotel.

"After every trough there is a recovery ... and I think they are expecting a recovery stronger than they will finally realise," he cautioned.

But while business confidence might be on a continued uptick, with 33 per cent of the 100 firms surveyed expecting better conditions in the national economy, a sizeable 40 per cent are bracing for the worst, expecting economic conditions to deteriorate in the year ahead.

And despite an overall upward movement in the business confidence index, companies are reporting that profits in the last three months were poorer than expected.

Surveyed firms report

Forty-six per cent of surveyed firms reported that profits were below expectation. But in the wave, the optimism that appears to have contributed to the index's climb, business owners say they expect the profit slide to end.

And following serious erosion in the balance sheet of some firms this year, more companies are looking to post better results in the future. According to the survey, firms that expected their finances to worsen fell to just 17 per cent, from a high of 44 per cent in the first this year quarter of 2009. Significantly, 48 per cent of firms now expected to regain in the coming year some of the past losses.

And in more mixed results from the business and consumer confidence findings, in the third quarter firms appeared more optimistic about opportunities to expand their business, with positive investment plans rising 10 percentage points to 40 per cent, even as negative investment assessments also rose to 51 per cent from 42 per cent.

"Overall, I think the business survey is about as good as you might expect in this kind of climate," Curtin said at the release Tuesday of the quarterly survey results.

On a whole, "firms expect no further declines in the economic environment here in Jamaica but they don't really expect a turnaround in the economy either".

Indices

The indices, however, painted a far gloomier picture of consumer confidence in the July to September quarter as it relates to job prospects, which worsened overt the previous period, making it the bleakest consumer outlook every recorded in the surveys.

Of the 600 consumers surveyed, 89 per cent reported that jobs were scarce - a general situation virtually unchanged from the last quarter and the highest per cent ever recorded.

"They expect the recession to continue, job prospects to worsen, they expect smaller income gains, smaller remittances in the year ahead and this is the typical way that consumers react universally," said Curtin.

The survey mirrored the official statistics showing that that fewer Jamaicans received remittances and reflecting smaller dollar amounts for those who received.

And to no one's surprise, the survey also reflected the reality of spending declines with homebuying plans falling to 10 per cent from 12 per cent in the second quarter, and purchasing plans for motor vehicles unchanged from the previous quarter at a low 17 per cent.

dionne.rose@gleanerjm.com