Big­ger test for con­sumers

Daily Nation (Barbados) - - News - Shawn Cum­ber­batch

by shawn­cum­ber­batch@na­tion­news.com

“Pes­simistic” Bar­ba­dian con­sumers are feel­ing the strain of higher ex­penses, lower sav­ings and stag­nant in­come lev­els.

While ex­pec­ta­tions were high fol­low­ing the May 24 Gen­eral Elec­tion, Bar­ba­dos-based sur­veil­lance and fore­cast­ing firm An­tilles Eco­nomics sug­gested al­ready low con­sumer con­fi­dence would be tested by the In­ter­na­tional Mon­e­tary Fund (Imf)-spon­sored eco­nomic re­cov­ery pro­gramme.

An­tilles Eco­nomics re­cently re­leased the find­ings of its Snap­shot of Con­sumer Con­fi­dence 2018 sur­vey, con­ducted “around the time of the gen­eral elec­tion”.

Man­ag­ing direc­tor Sta­cia Howard said the com­pany ex­am­ined Bar­ba­dian con­sumer’s per­cep­tions of eco­nomic con­di­tions in May and found “re­spon­dents were pes­simistic about their house­holds’ cur­rent con­di­tions, with 45 per cent say­ing that their house­hold’s sit­u­a­tion was worse to­day than one year ago”.

“Per­sons be­tween 56 and 70 years old were par­tic­u­larly neg­a­tive: 75 per cent be­lieved that their cur­rent sit­u­a­tion was worse than one year ago. When con­sid­er­ing dif­fer­ences by in­come, across all in­come cat­e­gories at least one in four per­sons were neg­a­tive about their cur­rent sit­u­a­tion,” she said.

This “in per­son” con­sumer sur­vey had re­sponses from a fi­nal sam­ple size of 300 peo­ple. To ad­just for dif­fer­ences in re­sponse rates, the re­sponses were weighted by the con­tri­bu­tion of each gen­der and age group to the to­tal work­ing age pop­u­la­tion.

The for­mer Cen­tral Bank se­nior econ­o­mist said the ma­jor rea­son Bar­ba­di­ans seemed pes­simistic about their cur­rent cir­cum­stances “ap­pear to be higher ex­penses and lower lev­els of sav­ings, as in­come lev­els re­mained the same”.

Sup­ports be­lief

“Re­spon­dents ex­pected their in­come and sav­ings to im­prove within the next 12 months – although 46 per cent also be­lieved their ex­penses would be higher – which sup­ports their be­lief that in the next 12 months their house­hold’s sit­u­a­tion would im­prove. As a re­sult, 44 per cent of re­spon­dents be­lieved that their house­hold’s sit­u­a­tion would be bet­ter within the next 12 months,” she added.

“The younger gen­er­a­tions were the most pos­i­tive, with 50 per cent of per­sons be­tween 21 and 55 years of age be­liev­ing that their sit­u­a­tion would im­prove com­pared to just 12 per cent of their older peers. The re­sults by in­come sug­gested that as in­come in­creased, con­fi­dence in the fu­ture de­clined.”

Howard also said “when con­sid­er­ing busi­ness and eco­nomic con­di­tions Bar­ba­di­ans were very pes­simistic about cur­rent con­di­tions, but more op­ti­mistic about the fu­ture”.

“Re­spon­dents were most likely to take a hol­i­day (ei­ther in Bar­ba­dos or abroad), re­model their home and buy ap­pli­ances, with 70 per cent, 37 per cent and 30 per cent, re­spec­tively, say­ing that they in­tend to do these ac­tiv­i­ties within the next 12 months,” the sur­vey found.

Howard said post-sur­vey Bar­ba­dos ne­go­ti­ated a four-year Ex­tended Ar­range­ment un­der the Ex­tended Fund Fa­cil­ity of the IMF to cor­rect the coun­try’s bal­ance of pay­ments and fis­cal chal­lenges.

She said new fis­cal mea­sures were “a sig­nif­i­cant strain on con­sumers, who, from the May 2018 sur­vey, were ex­pect­ing busi­ness and eco­nomic con­di­tions to im­prove”.

“The dis­con­nect be­tween their ex­pec­ta­tions and the even­tual re­al­ity could be linked to the op­ti­mism that ac­com­pa­nied the gen­eral elec­tions that took place in May 2018. Vot­ers might have ex­pected the change in ad­min­is­tra­tion to lead to im­prove­ments in eco­nomic and busi­ness con­di­tions in the short term,” she as­serted.

An­tilles Eco­nomics’ next con­sumer con­fi­dence sur­vey will be done this month and Howard said this would “re­veal the im­pact of the eco­nomic re­cov­ery pro­gramme on con­sumer con­fi­dence”.

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