Unique index at a two-year high - LMD

The LMD business magazine said that "the corporate community comes out of hiding, so to speak, as the troops of the state march deep into rebel territory and force the Tigers into a den of less than 200 square kilometres".

The journal said: "It's odds-on now that the war will be won by the State and that this will be a fillip for business - in times of economic hardship."

"Notwithstanding the obvious business downturn since the beginning of the year, the unique index that tracks business confidence has been on the tarmac, ready for takeoff, ever since the security forces liberated the LTTE's de-facto administrative capital Kilinochchi not long ago.

Now, with its military headquarters in Mullaitivu also in the hands of the State, Sri Lanka's engine of growth is signalling better times ahead in a post-war era," LMD's 'Business Confidence' column said.

Last month, the LMD-Nielsen Business Confidence Index (BCI) jumped to a two-year high of 112, from 96 basis points in the previous month.

The magazine also notes that "it has been a year or so since the controversial Ceasefire Agreement was abrogated by President Mahinda Rajapaksa. In the month that followed, the BCI stood at a measly 81."

But it points out that the "other side of the confidence coin is that the February score is more than 10 points below the all-time average of 123". The business community "may not be getting down to brass tacks just yet", it said.

According to The Nielsen Company, which conducts the monthly poll on LMD's behalf, more than half of the sample population say that the economy will 'improve' in the next 12 months - up 22 percentage points from the previous month.

"The result a year ago puts this in perspective, with just 15 per cent expressing confidence in the medium-term economy in February 2008. We had to turn the clock back to January 2005 to find a matching result," said LMD.