Business sentiment survey: steps in the right direction

Now that the results of the fourth quarterly survey of business confidence in the country have been publicised, subtle trends are starting to emerge as insights into the psyche of the local business leaders, corporate managers and seths, and how they perceive the economic environment are highlighted.
The survey, which incorporated responses from the manufacturing, wholesale and retail sectors found that business confidence, while still negative, has improved slightly over the previous quarter.
Responses collected by surveyors were tabulated by assigning a positive point for each optimistic response and a negative point for each pessimistic response. The cumulative perceived outlook is thus calculated by tabulating the net score for each query.
Using this methodology, it was found that 4 percent of the respondents feel that the countrys economic situation has improved over the past six months, while none of respondents had considered this to be the case in the previous quarters survey.
Similarly, 10 percent of those surveyed feel individual businesses have seen improving performance over the same period, compared to a negative 1 percent agreement with this assertion in the previous survey.
News stories covering the latest round of the OICCI initiative have already ranted over the cumulative findings of the assessment. However, it is the differences among the responses reported from the manufacturing, services and retail sectors which are truly insightful.
For instance, when asked whether the performance of their industry has improved or declined in the past six months, the manufacturing sectors sentiment has improved from 8 percent to 11 percent, quarter-on-quarter.
However, over the same period, responses from the services and retail sector have shown sharp declines from 3 percent to negative 9 percent and from 7 percent to minus 1 percent, respectively.
Similarly, retailers felt that the business environment in their cities has deteriorated significantly over the past six months as the current survey tabulated a response of negative 10 percent compared to 14 percent from the previous quarter.
Yet, both the manufacturing and services sector feel the situation has improved. The former showed an improvement in perception from negative 4 percent to 8 percent, while the latter chimed in with a jump to 7 percent from minus 10 percent the previous quarter.
Looking ahead to the coming six months, manufacturers appear much more confident compared to previous surveys. When asked about prospects for business expansion, manufacturers responses summed up a 10 percent positive tally as compared to minus 6 percent in Q3 and minus 28 percent in Q2.
While this rising enthusiasm was mirrored by services sector, retailers appear to be drowning in uncertainty as their responses stood at negative 17 percent compared against 22 percent in the previous survey.
On one hand, the latest survey shows subtle improvements in business sentiment in the country. On the other hand, it appears that the retail sector lacks conviction of better times ahead compared to manufacturers and service providers.
Successive rounds of similar assessments will help shed new light on the perceptions of various stakeholders in the industry and provide valuable insights to the expectations for economic indicators. For this reason, not only does the OICCI deserve commendation; they should also receive any assistance that can help to ensure that such surveys become a permanently recurring exercise.
Globally, confidence surveys provide much more detailed responses and their results often have significant impacts on capital markets and beyond. Other chambers and associations such as FPCCI and the numerous representative bodies from the textile sector, etc will do well to emulate this example and conduct similar surveys of their own.