Statistics published in the recently released third quarter Caricom Consumer Sentiment Survey indicate that while consumer sentiment across the region recorded a significant improvement between July and September this year, public confidence in government handling of the respective economies of the region remains relatively low.
According to the survey, which is undertaken by the Department of Management Studies of the University of the West Indies’ Cave Hill Campus, the overall regional Consumer Sentiment Index, rose from 58 to 66.6 over the last quarter. Comparative figures for the region’s major trading partners for the third quarter indicate that the Consumer Sentiment Index fell from 59.4 to 57.4 in the USA, fell from 48 to 45 in the UK and rose from 45.2 to 45.4 in Canada.
The report indicates that commodity-producing countries in the region, including Guyana, Trinidad and Tobago and Suriname reflected more robust consumer sentiment than countries that are dependent on tourism, while the overall regional improvement in sentiment was driven by a 17 per cent increase in the number of consumers in the Caribbean reporting improved financial circumstances, 21 per cent increase in the number of persons expecting their personal financial situation to improve over the next 12 months and a 16 per cent increase in the number who generally expect economic conditions to improve over the next 12 months.
The survey indicates that over the third quarter of this year consumer optimism was highest in Guyana with a confidence level of 82 while at the other end of the index spectrum consumer confidence in Grenada dipped from 60 over the previous quarter to 27 in the last quarter. The decline in the latter case was driven by what the survey says was a “47% increase in the number of consumers reporting that their personal situation had worsened in the quarter, a 49% increase in those who thought business conditions had worsened, a 70% increase in those who expected business conditions to worsen over the next 12 months and an 84% increase in the number reporting that buying conditions had worsened.”
Consumers in Grenada also attributed their diminished optimism to the fallout from the LIAT strike action of earlier this year which adversely affected the carnival period, the decline in activity in the country’s construction sector and the loss of financial reserves as a result of the collapse of British American, Capital Bank and the SGL Holdings.
The Consumer Sentiment Survey is an index which measures consumer attitudes to countries’ economies. It surveys people on their feelings about their individual financial situation and the overall situation of the economy in the present and in the future. In the United States the index is published monthly by the University of Michigan.
According to the third quarter UWI survey, stronger consumer sentiment in Guyana, Suriname and Trinidad and Tobago reflected the fact these economies have benefited from the current boom in commodity prices.
“There was a major rebound in consumer sentiment in Guyana as the CCSI increased from 54 to 82. The improvement in sentiment was driven by a 70% increase in the number of consumers reporting that their personal situation had improved during the quarter, a 66% increase in those who expected their personal situation to improve over the next 12 months, a 76% increase in those who expected business conditions to improve over the next 12 months and a 41% increase in those who thought buying conditions had improved,” the third quarter survey says. The survey also alludes to significant improvements in sentiment in Trinidad & Tobago where CSCI improved from 54 to 72, driven by a 33 per cent increase in the number of consumers reporting that their personal situation had improved during the quarter, a 34% increase in those who expected their personal situation to improve over the next 12 months and a 78% increase in those who expected business conditions to improve over the next 12 months. The reduction in crime as a result of the curfew emerged as a major factor influencing improved sentiment. In St Kitts, the improvement in the CSCI rate from 46 to 60 “was driven by a 47% increase in the number of consumers reporting that their personal situation had improved during the quarter, a 94% increase in those who thought that current business conditions had improved and a 54% increase in those who expected business conditions to improve over the next 12 months,” the report says.
More moderate improvements in CSCI sentiment were recorded in Jamaica, St Vincent & Grenadines and St Lucia, while there were slight declines in Barbados and Dominica.
While the survey indicates that overall consumer confidence has risen over the last quarter, it paints a less flattering picture of consumer confidence in regional governments’ handling of the economies of the economies. “A table on Government Economic Policy Rating” published as part of the survey which asks respondents to indicate whether they felt that governments were doing a “good,” “only fair” or “poor” job indicates that St Vincent and the Grenadines scores the highest, 39 per cent in the “good job” category followed by Suriname with 24 per cent and Trinidad and Tobago, Barbados and St Lucia with 20 per cent. The Government of Guyana’s “good job” rating is 10 per cent while the lowest “good job” rating of any Caribbean government is Grenada, at 2 per cent. In the “only fair” job category Dominica and Suriname are rated at 42 per cent, Barbados and Jamaica at 40 per cent, St Lucia at 39 per cent and Trinidad and Tobago and St Kitts at 35 per cent. According to the survey 34 per cent of Guyanese respondents say that the government is doing an “only fair” job in its handling of the economy, while 25 per cent of Grenadians have a similar view on their government’s handling of the economy. Meanwhile, statistics provided in the survey indicate that 71 per cent of respondents in Grenada are of the view that their government is doing a ‘poor” job in their handling of the economy while 51 per cent of respondents share a similar sentiment in relation to official handling of their country’s economy. The survey says that in both Guyana and Jamaica, 47 per cent of respondents surveyed over the last quarter felt that their respective governments were doing a “poor” job in their handling of the economies of the respective countries.
