Business confidence continues to head south

The LMD-Nielsen Business Confidence Index (BCI) registered 89 in May, nudging down by four basis points from the previous month. 

While this marks the fifth consecutive monthly fall, LMD notes that it represents only a marginal decline compared to April when the index plummeted by 52 basis points at the height of the curfew.

Additionally, the leading business magazine points out that the BCI remains higher than in the immediate aftermath of last year’s Easter Sunday attacks when the unique barometer of corporate sentiment registered 62 in May.

Nielsen’s Director – Consumer Insights Therica Miyanadeniya explains in the latest edition of LMD: “There seems to be light at the end of the tunnel as Sri Lanka has more or less managed the coronavirus effectively compared to other countries…”

“The country must now count the losses as this merciless virus has affected every sector, individual and fibre of society,” she adds.

LMD reports that the impact of the coronavirus is cited as the most pressing concern in business circles, overshadowing the likes of inflation, the value of the rupee and the tax regime. 

Meanwhile, the spread of COVID-19 is considered to be the chief national concern, followed by the economy and adverse impact on daily wage earners.

Commenting on the outlook for the index, a spokesperson for the magazine says: “Sentiment seems to be holding with many corporates voicing cautious optimism when it comes to the future of their businesses.” 

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“But whether or not the prospect of an election looming on the horizon will be seen as an opportunity to deliver political stability will be key to the BCI’s direction in the short term,” he adds.

Media Services, which publishes LMD, says the latest edition of the magazine will be released this week while its digital edition is available on WhatsApp and its social media platforms (for the full BCI report, visit www.LMD.lk).