A recent survey of the business sector has revealed that confidence in the Barbados economy has deteriorated dramatically within the past year.
What’s more, local firms are not expecting any immediate rise in their earnings or in the overall level of employment within the next three months to a year, based on the preliminary findings of the Business Outlook 2017 survey.
The quarterly survey, which is conducted by Abelian Consulting Services Inc., ranks the level of confidence in the economy on a scale from -60 and -100, which is considered “very low”, to 60 per cent and 100 per cent, which is considered high.
It shows that the level of confidence among businesses had declined significantly to minus eight per cent, compared to 15 per cent during the first quarter of last year.
Director and Chief Executive Officer of Abelian Consulting Ryan Straughn delivered the preliminary results on Wednesday during the Ernst & Young/Barbados Chamber of Commerce and Industry (BCCI) breakfast forum at the Lloyd Erskine Sandiford Centre.
The economist said he believed the dramatic slip was due mainly to the recent disappointing reports on the economy, the lack of implementation of announced Government projects and “subsequent news that have been taking place”.
“Throughout 2016 there was a sense in the country among business executives that things would likely improve because you have a net positive view of where things were going in general. But now we have come to a situation where that now is minus eight per cent, which essentially is saying, at the moment in the private sector there are more people who think that overall things are not going to get much better,” explained Straughn.
He said back in 2015 firms appeared to generally have a positive view of the road ahead. However, he reported that since 2016 this had changed.
“So people are obviously slightly pessimistic about the immediate short term,” said Straughn, who is also a political candidate for the Opposition Barbados Labour Party.
“Today everybody is pretty much pessimistic about the next three months. They are even more pessimistic about the next six months and you can see that for the most part, a year out, it is the same level as the short term. So there is no expectation right now among the private sector that looking a year ahead, that things are going to be any better,” he stressed.
While in past surveys businesses strongly believed they would outperform the country’s economic performance, he said this was not the case this time around.
“For the first time now we are seeing it is at its lowest since we started looking at this. So fewer executives believe now in their own ability to withstand the current situation as it relates to the foreign exchange crisis or the Government’s debt problem. The private sector ability now to control its own fate is now being dampened by Government activity,” he explained while warning of the need for change.