Business optimism rose in December compared to November, according to an ongoing Verdict survey, due to the recovery in the manufacturing and services sectors, although concerns about the Omicron variant remain.
Verdict has been conducting the survey to study trends in business optimism during COVID-19, as reflected by companies’ views on their future growth prospects amid the pandemic.
Analysis of survey responses in December shows optimism about future growth prospects increased by four percentage points to 67% from 63% in November.
Respondents who were optimistic fell by one percentage point to 22% in December, while those who were very optimistic increased by five percentage points to 45%.
The percentage of neutral respondents (neither optimistic nor pessimistic) decreased two percentage points to 13%.
Respondents who were pessimistic increased by one percentage point to 8%, while those who were very pessimistic decreased by three percentage points to 12% in December.
The analysis is based on 435 responses received from readers of the Verdict websites between December 1 and December 31, 2021.
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Improvement in manufacturing and services sectors inspires business confidence in December
Creighton University’s Mid-America Trade Conditions Index, an economic indicator for the nine-state region from Minnesota to Arkansas, was 64.6 in December compared to 60.2 in November. The university’s economists highlighted that the region is showing healthy growth in manufacturing activity and added that regional growth will remain strong. The survey also found that 50% of supply managers expect the Omicron variant to disrupt supply deliveries, while 42.3% expect no impact.
Meanwhile, MetLife and the US Chamber of Commerce Small Business Index reported a strong score for the quarter ending December 2021 at 63.0, which is the highest since the start of the pandemic. The optimism among small business owners in the US was manifested through their plans to increase investments and staffing levels. The survey found that 38% of small business owners intend to hire more staff, while 42% aim to invest in their business in 2022.
Similarly, the Bank of Korea announced that the Business Survey index score in the manufacturing sector increased to 95.0 in December from 90.0 in November. The University of Cyprus Economic Sentiment Indicator (ESI-CypERC) also increased 2.1 points from the previous month in Cyprus. The increase was attributed to an increase in business optimism in the country’s industrial, construction and service sectors.
The Bank of Botswana’s Quarterly Business Expectations Survey (BES) further suggested that the country’s businesses remained optimistic in the fourth quarter of 2021 compared to the previous quarter. The increase in business optimism was the result of the expected improvements in sales volume, exports, employment and investments in equipment and vehicles.