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Economy health check yields "concerning" results

Economy health check yields

Monday 28 October 2019

Economy health check yields "concerning" results

Activity among local businesses has reduced significantly in the last three months, with the picture for finance more negative than positive for the first time in almost a decade, according to the economy's latest 'health check'.

The figures came in the latest Business Tendency Survey, published last week by Statistics Jersey.

According to the researchers, the figures were compiled from, "Chief Executives and Managing Directors giving their opinions on the current situation of their business compared to three months earlier, and their expectations for the next three months".

Overall, the proportion of businesses reporting an increase in activity was only "marginally" higher than those reporting a decrease. 

Half of businesses reported that their input costs were higher, while a fifth reported increased product prices.

A quarter (24%) of businesses reported an increase in business activity, whilst a fifth (21%) reported a decline.

Meanwhile, Jersey's largest sector - finance - reported a drop in activity of more than a quarter (26 pp).

The sector was significantly more negative than last quarter in four key 'health' indicators: business activity, input costs, profitability, and employment.

The last time the finance sector recorded more significantly negative indicators than significantly positive indicators was September 2012.

The non-finance sector did not have any significant changes, apart in its profitability indicator, which was 9 pp lower.

As for the next three months, the outlook for all-sector future business activity looks neutral (-2 pp), with a fifth (20%) of businesses expected to see an increase, compared to 22% expecting a decrease while the remaining 58% anticipate no change.

Speaking of the survey, Deputy and Chair of the Economic Affairs Scrutiny Panel Kirsten Morel commented on Twitter: "There are some very concerning figures in the latest business tendency survey.

"Maybe now, the government will start to realise that it can't keep piling costs onto business."

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