The March LMD-Nielsen Business Confidence Index (BCI) reflects a notable recovery from its previous south-bound trajectory, rising by 17 basis points (to 155) from where the unique barometer of corporate sentiment stood in the previous month, the latest edition of leading business magazine LMD reports.
Nielsen’s Managing Director Shaheen Cader explains that “the recovery is mainly due to improved perceptions of business performance and optimism that the economy would pick up. The Government laying out its plans for development and subsequent investment missions seem to have resulted in stemming the decline of the index.”
He also notes that “concern over ethnic issues brought about by the ‘Sinhale’ campaign caused significant concern, which impacted business confidence in February. But with this concern declining sharply in March, perceptions of future business and economic performance have recovered.”
The exclusive monthly survey reveals that businesspeople are optimistic about the future trajectory of the economy, with 43% of those surveyed saying that it will improve in the coming 12 months.
Where biz prospects are concerned, more than half of the sample population forecasts improved conditions ahead, while 27% state that sales volumes will ‘stay the same’.
Meanwhile, almost half the poll respondents (47%) believe that the country’s funding environment is in positive territory. Endorsing this view, one respondent notes that “with the new Government in place, the investment environment has become very transparent…”
However, despite the optimism, LMD says: “Whilst businesspeople have been more optimistic in their responses to the latest BCI survey than we expected, there’s bound to be a backlash following events on the energy front.”
“We would be surprised, therefore, if the confidence barometer moves in any direction but down, in the near term,” the magazine concludes.
Its publisher Media Services says that the March edition of LMD will be released to bookstores and supermarkets on Friday, 8 April (for the full BCI report, go to www.LMD.lk).