MCCI Business Confidence Index: Entrepreneurs on the upswing following Budget

Based on the quarterly business survey, carried out between 1 and July 22 of this year, the Mauritius Chamber of Commerce and Industry (MCCI) has seen a marked improvement of the business confidence level as per its quarterly survey. The latest report of the MCCI Business Confidence Indicator published on Thursday 11 August says that the confidence level was up for the second quarter of the year.

“At the sectoral level, we see a general increase in confidence indices. This is the trade sector, which recorded the highest increase of sectoral indicator, or 5.7 per cent. This increase is largely based on a very positive anticipation of entrepreneurs regarding future business developments. The balance of assessments on the future was positive at 10.5 points. The operators of this sector anticipate a significant improvement in their sales figures in the next quarter compared to the same period last year,” said the MCCI.

For the services sector, this is the third consecutive increase in the confidence indicator. The second quarter index rose 4.6% after increases of 10.5% and 6.7% in the fourth quarter of 2015 and first quarter of 2016. All the variables used in the estimation of the indicator for this sector are favourable. The operators claim that sales are rising and anticipate a ripple effect in the third quarter 2016.

For the manufacturing sector, we see a slight increase in confidence indicator at a rate of 1.8 per cent. Manufacturers have seen a drop in sales in the second quarter but expect a catch in the third quarter.

This increase comes after two positive quarters. The index was up by 3.8 points (4 per cent) between April and June this year and stands now at 98 points. To recall, the entrepreneurs confidence indicator increased by 6 per cent and 2.2 per cent in the fourth quarter 2015 and first quarter 2016 respectively. This implies a continuous and positive development of the Mauritian economy in the second quarter of 2016.

The majority of businesspersons who were surveyed have a positive economic outlook over the next three months and are positive about the current economic climate. According to the latest survey, the business climate improved in the second quarter. This improvement reflects positive assessments of future prospects.

Regarding future prospects, the balance of expectations of entrepreneurs is very positive, outweighing those with a negative outlook by 19.6 per cent. About 42 per cent of entrepreneurs expect business to improve over the next 12 months and just over 22 per cent who expect a worsening situation. The remaining 36 per cent of companies surveyed indicate a status quo.

Concerning business developments, the dark spot remains sales figures. During the first quarter of the year, about 26 per cent of entrepreneurs have seen a decline in sales as compared to 22 per cent who saw an improvement. The remaining 52 per cent of the panel, observed a stabilisation of their turnover in 2016. Based on the composite index of the business climate for the first quarter 2016, the MCCI forecasts an increase in GDP of 3.4%, the same rate as over the past three months 2015.

This pace is expected to improve in the second quarter of 2016, with an increase in GDP compared to the same quarter of 2015 by 3.6 per cent. To recall, the rate was 2.4% in second quarter 2015. The carryover for 2016, which corresponds to the rate of growth that would be obtained if the value of GDP, remained to the last two quarters of 2016 unchanged.

“Local entrepreneurs have adapted and have made considerable efforts to seek new markets and also new segments to enhance their growth. So they re-evaluate and rethink their strategies to be more efficient, to be more resilient and more efficient. This new approach has increased their turnover,” stated the report.