Economic sentiment experienced a slight uptick in June, as the business sector adopted a cautiously optimistic perspective, despite ongoing worries related to escalating costs, geopolitical conflicts, and broader economic unpredictability.
The most recent Business Confidence Index (BCI) survey by LMD-PEPPERCUBE, conducted in the early days of June, indicates a modest rise in economic optimism.
Approximately 32% of respondents anticipate an improvement in the economy over the next year, representing a four percentage point increase from May. Conversely, less than half (48%) believe that economic conditions will remain unchanged, which is an eight-point decrease from the prior month.
Additionally, 20% of participants expect economic conditions to deteriorate, reflecting a four-point rise from the previous month.
Regarding sales expectations, there was only a slight improvement. Forty percent of respondents foresee an uptick in sales volumes over the next year, up from 38% the month before.
However, nearly half (49%) expect their sales to remain stable, a decline of five percentage points, while 11% project a decrease in sales volumes, increasing by three points compared to the previous month.
Furthermore, nearly a third (31%) reported an increase in sales over the last year, which is a significant 15 percentage point drop from the previous month. Slightly over 40% (43%) indicated that their sales volumes remained unchanged, consistent with the figures from May, while more than a quarter (26%) reported an increase, rising from 11% the month prior.
Looking forward to the next three months, business sentiment appears to be cautious, with only 35% of participants expecting an increase in sales volumes, a decline from 39% in May.
Additionally, 50% of the surveyed population believe their sales volumes will remain the same, a slight decrease of 1%, while 15% anticipate a decline in sales over the next three months, marking a five-point increase from the previous month.
In terms of the investment environment, confidence remained low in June, with no respondents categorizing the outlook as ‘very good,’ a decline from 1% in May.
The percentage of those describing the investment climate as ‘good’ plummeted by 28 points to just 11%, down from nearly 39% in May. In contrast, 56% of respondents rated the investment climate as ‘fair,’ which is an increase of 14 percentage points from the previous month.
On the other hand, one-third (33%) of participants consider the investment climate to be ‘poor’ or ‘very poor,’ an increase of 15 percentage points from the prior month.
Regarding employment outlooks, 16 respondents indicated plans to increase their workforce, a slight decline of four percentage points from May.
Moreover, over two-thirds (68%) of those surveyed plan to keep their current staffing levels, down just one percentage point, while 16% foresee downsizing in the next six months, a decrease of five points from May.
– LMD Financial Chronicle Biz English | Sri Lanka Business News.
