Biz confidence intact - LMD

Unique index nudges upwards, says leading business magazine:

The only measure of business confidence in this country, the LMD-Nielsen Business Confidence - or BCI, as it is known - moved up from 87 in the previous month to 94, says business magazine LMD, in its January issue.

But there is anxiety about the medium-term economic outlook, LMD reports, with a “growing majority of Nielsen’s sample population now say that the economy ‘will get worse’ “. Sixty two per cent said so, which LMD says is a five-month high. On the contrary, a third of the sample population say their sales volumes have gone up in the last 12 months, despite the global economic scenario.

As LMD observes, “on the world stage, the news has been depressing to say the least.

The World Bank’s Chief Economist said last month that planet earth faces ‘the worst recession since the Great Depression’. The bank forecasts that the economic meltdown will reduce demand for oil and that this, in turn, will continue to put pressure on the price of oil.

The commodities boom of the last five years, it observes, ‘has come to and end’.” LMD also states that nearly 30 per cent of survey participants expect their sales volumes to rise in the 12 months ahead - this, however, is nine per cent lower than in the previous month and the lowest since July last year.

As for projections, the magazine’s BCI column says: “The index is likely to oscillate within a narrow band of 10-20 basis points until the Rajapaksa regime liberates the Wanni, as it says it will.

The status quo could be viewed as either representing the calm before the storm or a case of ‘wait and see’ if the war ends.”