Business confidence rises in 2019, AGI survey reveals

Business confidence, as measured by the latest periodic survey of business executives conducted by the Association of Ghana Industries showed some recovery as AGI’s Business Barometer rose  from 95.0 points in the third quarter of 2018 to 99.5 points in fourth quarter  of 2018.

According to the fourth quarter, 2018 edition of the Association of Ghana Industries (AGI) Business barometer, labour patterns showed there was increase in the hiring of additional workers to boost production, while the euphoria of the festive period, with its customary increase in consumer demand, possibly accounted in part for the rise in business confidence.

Likewise, Bank of Ghana’s (BoG) latest Business Confidence Survey data released in the last week of January showed some rebound in confidence and optimism about performance of the domestic economy. The index as at December last year inched upwards to 97.3 percent, after it had dropped to 95.1 percent in October from 101.4 percent recorded in June 2018.

While the macro-economic indicators looked favorable in the fourth quarter of last year, a good majority (54 percent) of respondents believe the Budget Statement and Economic Policy for 2019 as presented last November, met their expectations.

Industry observers however remain unsure of how well government will sustain fiscal consolidation measures with the exit of the International Monetary Fund (IMF).

Overall Perception of Business Performance

Businesses remained more optimistic during the 4th quarter of  2018 than they were during the preceding quarter. Industry chieftains were optimistic about business performance over the last three months of 2018, and 28 percent attested that business was better compared to the 22 percent who reported same in the 3rd quarter.

About 73 percent of the survey respondents said their business either remained the same or worsened during the period under review. About 57 percent of business owners predicted a prosperous first quarter in 2019.

This could be attributed to the anticipation of a robust economy after Ghana exits the IMF programme on April 4.

However, 35 percent of the respondents anticipate that business performance in 1st quarter, 2019 will remain the same while 5 percent who were less optimistic said the situation will worsen.

Business Barometer

The Business Barometer Indicator (BBI) is an AGI proprietary tool that measures the level of confidence in the business environment and predicts short-term business trends.

The index is calculated out of “current” business mood and “expectation” of businesses for the future.

By Joshua W. Amlanu