The results of the Chambers’ Business Performance Survey have been tabulated. Many of the findings will not surprise the business community who are on the frontline of economic activity. Ever since the reopening of the economy after Covid-19 lockdowns, there has been a general uptick in economic activity as the economy seeks to return to a post covid-19 level sooner rather than later.
Business confidence appears to be on the rise with 66% of respondents forecasting increased turnover over the next twelve months while 71% of respondents forecast an increase in business profitability over the same period while only 29% report worsened cash flow relative to the previous quarter (January- March,2022).
This optimism is however tempered by 78% of respondents forecasting an increase in prices of their goods or services over the next quarter, with 59% of respondents reporting an increase in prices over the previous quarter. There is clearly a threat of inflation which can derail, the expansion in consumption and economic activity that can lead to job creation. Global issues appear to be conspiring against the St. Lucian Economies recovery.
61% of respondents face pressure to raise prices from the purchase price of goods, 59% from fuel, 59% from utilities and 41% from labour costs. With operating costs increasing firms have had little option but to pass on these increased costs in the form of higher prices to consumers.
The global inflationary pressures are affecting business across the board and are forcing them to pass on these price increases to customers as fast as they come. Managing this phenomenon will continue to be ticklish. Policy interventions, once again, must try and serve many masters (unemployment, social support, economic growth, and inflation). Post Covid-19 economic recovery will continue to pose serious challenges for both Government and Businesses for some time. With limited policy tools at its disposal, Government will have to find a way to balance its various priorities without unravelling the critical pistons of the society and economy.
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