Business confidence at its lowest for 12 months

And between July and September, the finance sector recorded its lowest levels of both optimism and business activity for at least two years.

Economic Development Minister Lyndon Farnham: 'It's very positive news'

However, the construction industry saw a significant improvement in areas including product prices, employment and future business activity.

The figures, compiled by the States Statistics Unit, were published in the Jersey Business Tendency Survey yesterday. The survey samples private businesses in the Island, asking their opinions on the current situation of their business compared to three months previously, and also for their expectations for the next three months.

Firms were asked about their business activity – the total amount of work undertaken – with factors including turnover, the number of products produced and chargeable hours considered.

The survey found that the all-sector business activity indicator was ‘marginally positive’ in the last quarter but ‘down significantly from the strong positive levels recorded in the previous two rounds of this survey’.

For the first time in the six years that the survey has been run, the non-finance sectors were more positive in terms of business activity. More than a quarter of firms reported increased business activity in the last quarter, compared to a sixth in the finance sector.

Confidence in construction has been encouraging

Business optimism in the finance and non-finance components of the economy declined by 14 per cent and nine per cent respectively. Despite this general decline, the survey found that business optimism in construction was ‘up significantly’ on the previous round of the survey and that the sector had recorded its highest level to date.

Economic Development Minister Lyndon Farnham said that the despite the decline in finance business activity and optimism, the economy was still growing.

‘I’m not surprised that confidence has dipped,’ he said. ‘Last year the economy grew strongly by five per cent. That was largely due to a significant increase in finance-sector profits. The Fiscal Policy Panel have already indicated that the economy was expected to grow at a slower rate in 2015 – at a rate of two per cent. It is clear that the forecast is reflected in the results of this survey.’

A total of 487 firms were sent a questionnaire and 289 were returned – a 59 per cent response rate. The respondents accounted for more than two-fifths of total private-sector employment in Jersey.

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