BASSETERRE, St. Kitts – THE latest Business Outlook Survey (BOS) done by the Eastern Caribbean Central Bank (ECCB) has painted a bleak picture of the first six months of the year, and despondent business owners within the region expect an equally unpromising future.
The survey targeted 25 companies in each of the member territories and questioned about 200 businesses in the region. Opinions of businesses in respect of the current and expected future state of their business operations, as well as the economies in which they operate were recorded and analysed by the Bank.
The latest results for the first half of 2009 indicate that businesses in the Eastern Caribbean Currency Union (ECCU) anticipate general conditions to continue to deteriorate. This follows a relatively poor performance in the second half of 2008 as the business community in all the member countries indicated that conditions had worsen compared with the corresponding period of the previous year.
According to the BOS, survey respondents identified low sales turnover, low cash flow, high debts, high receivables and high utility rates as the most challenging problems of businesses.
“Business owners pointed out some of the channels through which the current global economic downturn is affecting the ECCU economies. These included less spending by tourists as well as shorter stays, a reduction in the flow of remittances and a tightening in conditions of external supplier,” the report revealed.
A further analysis by sector reveals that the representatives from the agricultural, manufacturing and banking sectors were the “most pessimistic” about their conditions over the second half of 2008 when compared with the corresponding period in 2007. Similar pessimism was reflected regarding key indicators such as sales performance and profit for the first half of 2009. However, the report states that businesses expect some improvement in their cost of production and in the prices of goods and services.
The survey revealed that the majority of businesses relied predominantly on their cash flow, overdraft facilities at banks and retained earnings to finance their working capital needs.
And, according to Sybil Welsh, Deputy Director Corporate Communications ECCB, general sentiment expressed by businesses is one of overall tightening over the second half of 2008 and a similar period of distress for the first six months of this year.
Welsh informed that the next BOS is impending to collect data on businesses in the region to derive an outlook for the next six months.
