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Business activity on the rise... but so are costs

Business activity on the rise... but so are costs

Thursday 19 July 2018

Business activity on the rise... but so are costs


The latest official stats suggest that business activity is going up in Jersey, with more than a third (36%) of businesses reporting an increase against 11% saying there's been a decrease.

The business activity indicator was strongly positive for both the finance sector (+31 percentage points) and the non‐finance sector (+23 pp). Within the latter, the indicator was strongly positive (+41 pp) for wholesale and retail, and positive for the construction sector (+21 pp) and other non‐finance businesses (+17 pp).

 

Business activity, June 2018

The latest Business Tendency Survey also said its 'profitability indicator' was neutral (+1 pp), an increase of 10 pp from last quarter. The majority of companies (57%) reported no change in profitability, with the remainder split evenly between increased and decreased profitability.

But the 'input costs indicator' was the most negative of the eight current indicators at 54 pp; more than half (55%) of companies reported increases and very few (2%) reported decreases. It was at a similar level in March (‐50 pp), indicating that input costs have continued to rise for the majority of businesses. In fact, it has been strongly negative since December 2016, when the survey was restarted, with the lowest level to date seen in June 2017 (-55 pp).

All‐sector indicators, Business Tendency Survey (June 2018)

Input costs were at ‐63 pp for the non-finance sector with two‐thirds (63%) of companies reporting an increase in the latest quarter. This was in contrast to product prices (balance of +35 pp), for which only two‐fifths (38%) of non‐finance sector companies reported an increase. It stood at only -30pp for the finance sector.

The profitability indicator was slightly negative (‐5 pp), but 17 pp higher than last quarter. For the finance sector, it stood at +17 pp. 


As for future indicators, the survey found that the outlook is positive for business activity over the next three months with +25 pp.  A third (36%) of businesses are expected to see an increase in activity, with half (54%) seeing no change.

 

 

 

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