In August, there was a notable increase in economic confidence, with a larger proportion of business leaders predicting positive developments in the near future.
Nevertheless, the overall sentiment remains cautious, as half of the executives surveyed anticipate that economic conditions will remain stable due to escalating costs and ongoing uncertainties in the broader economic environment.
The most recent LMD-PEPPERCUBE Business Confidence Index (BCI) survey, conducted during the first week of August, indicates a gradual trend toward increased optimism regarding the economy.
More than 40% (41%) of the respondents believe that the economy will experience improvement over the next year, which represents a four-point rise since July. Conversely, 50% of those surveyed expect economic conditions to remain unchanged, reflecting a three-point decrease compared to the previous month.
A small minority, only 9%, foresee a decline in economic conditions, which is a slight decrease of one percentage point from July.
SALES VOLUMES: Expectations regarding sales volumes have softened in August, with half (50%) of the respondents anticipating an uptick over the next 12 months, down from 52% in the prior month.
Additionally, 38% expect their sales to remain stable, a decline of three percentage points from July, while 12% predict a decrease in sales, which is a five-point increase from the previous month.
Over the last year, 39% of respondents reported an increase in their sales volumes, which is a one-point decline from July.
At the same time, 38% stated that their sales volumes remained unchanged, a significant drop of seven percentage points from July, while 23% reported an increase, an eight-point rise from 15% in the previous month.
Looking forward to the next three months, the outlook appears stable, with 41% of survey participants expecting an increase in sales volumes compared to 40% in July.
Additionally, nearly half (47%) anticipate their sales volumes to remain the same, a slight decrease of 2%, while only 12% expect a decline, which is one percentage point higher than the previous month.
INVESTMENT CLIMATE: Sentiment regarding the investment climate remained subdued in August, with no respondents rating the outlook as ‘very good’, a decline from 2% in July.
Currently, 10% describe the investment climate as ‘good’, while 67% rate it as ‘fair’, representing a significant 14-point increase from the previous month (53%).
In contrast, 22% of respondents view the investment climate as ‘poor’ or ‘very poor’, which is an eight-point decrease from the previous month (30%).
EMPLOYMENT PROSPECTS: One in five (20%) participants in the survey plan to increase their workforce, marking a five-point increase since July.
Approximately two-thirds (67%) of respondents expressed their intention to maintain current staffing levels, a decrease of six percentage points, while 13% anticipate downsizing over the next six months, which is an increase of one point from the previous month.
– LMD Financial Chronicle Biz English | Sri Lanka Business News.
