Consumer sentiment in St Lucia improves

Rising food and fuel prices, slowing of the global economic recovery, fiscal adjustment policies, and a heightening of political activity in some countries, took a toll on consumer sentiment across Caricom during the second quarter of 2011.
In the latest, Department of Management Studies, UWI, Cave Hill quarterly survey of consumer sentiment in Caricom, the Consumer Sentiment Index (CCSI) fell from 68 to 58.    The CCSI for the second quarter of 2011 ranged from a high of 76 in St Vincent & the Grenadines to a low of 46 in St Kitts & Nevis.  While consumer sentiment was essentially unchanged in Barbados, Jamaica  and St.Vincent & the Grenadines, there were major changes in sentiment in a number of countries.
An ease in excise taxes on petroleum products and increased political activity appear to have fuelled a surge in the CCSI in St Lucia from 53 to 73.  The improvement in sentiment was driven by a sharp increase in the number of consumers who felt business conditions were better than one year ago and that buying conditions in the country had improved.  The CCSI also improved from 65 to 73 in Dominica, and from 56 to 61 in Antigua & Barbuda.  In both these cases, the improvement in sentiment was driven by an increase in the number of consumers who felt that general economic conditions had improved from one year ago.
There was a major decline in consumer sentiment in Guyana where the CCSI fell from 85 to 54.  The decline was driven by a dramatic increase in the number of consumers who expect general economic conditions, business conditions and their personal financial situation to worsen over the next twelve months.  To what extent these expectations are due to any uncertainty surrounding the impending change in the presidency of that country remains an open question.  There was also a major reversal in sentiment in Grenada where the CCSI fell from 73 to 60.  The decline in Grenada was due to a marked increase in the number of consumers who felt that economic conditions had worsened over the last three months and that they were likely to worsen over the next twelve months.
Consumer sentiment continues to be especially negative in St Kitts & Nevis with the CCSI falling from 54 to 46.  In addition to the factors impacting on all Caricom countries at this time, the situation in St Kitts & Nevis appears to be compounded by major tax reforms, especially the introduction of VAT and Personal Income Tax.  In Trinidad and Tobago, a large increase in the number of persons who expect business conditions and their personal financial situation to worsen over the next twelve months saw the CCSI drop from 63 to 54 in that country.
In somewhat disheartening news for businesses in Caricom, the Current Buying Conditions Index (CCBCI) fell from 91 to 81 as more consumers across Caricom thought it was a bad time to undertake major purchases (purchases of consumer durables, cars and houses).  The CCBCI improved from 44 to 96 in St Lucia, 61 to 87 in Antigua & Barbuda, 93 to 111 in Dominica and 71 to 89 in Barbados.  The CCBCI worsened from 123 to 85 in Guyana, 97 to 67 in Jamaica, 126 to 93 in Grenada, 112 to 93 in St Vincent & the Grenadines, from 69 to 62 in St Kitts & Nevis and was essentially unchanged in Trinidad & Tobago Government Economic Policy Rating:  As to the economic policies of the government would you say the government is doing a good job, only fair, or a
poor job?
The percentage of consumers who thought their government was doing a good job in terms of economic policies fell to 9% from 14% last quarter.  Respondents in St Vincent & the Grenadines, St Lucia, Barbados, Dominica, Suriname and Grenada gave the highest marks to current government economic policies in that a majority of respondents rated government’s economic policy as good or only fair.  There were noticeable improvements in the rating for government economic policy in St Lucia and St Vincent & the Grenadines, while the rating worsened in Guyana and St Kitts &
Nevis.
While there was a marked improvement in consumer sentiment in St Lucia, consumer sentiment in the region continues to be negative.  Improvements in consumer confidence across the region will depend largely on a more robust global economy recovery and reductions in international food and fuel prices.