St. Kitts – Nevis Leads Barbados and OECS In Investment Outlook

December 15, 2009

Port Zante and Basseterre - Aerial View

Port Zante and Basseterre – Aerial View
Photo By Erasmus Williams

Basseterre, St. Kitts – Nevis
December 15, 2009 (CUOPM)

More signs that the local business sector continues to have confidence in the St. Kitts and Nevis economy. Thanks to the policies of the governing St. Kitts-Nevis Labour Administration under the leadership of Prime Minister Hon. Dr. Denzil L. Douglas.

According to the Caribbean Media Corporation (CMC), a survey, published by the Department of Management Studies at the Cave Hill campus of the University of the West Indies (UWI), found that in Barbados and the OECS, St. Kitts and Nevis have the most optimistic investment outlook over the next 12 months. St. Kitts and Nevis and Barbados are the most optimistic about employment prospects over the next six months.

The report noted that despite the much publicised economic slowdown of the last year, the majority of companies in St. Kitts and Nevis, Grenada and Dominica reported unchanged or improved financial performance over the last six months.

However, the majority of companies in St. Lucia, Antigua and Barbuda, St. Vincent and the Grenadines and Barbados report a worsening of financial performance with companies in St. Lucia and Antigua reporting the most significant declines in financial performance, “with nearly two-thirds of companies reporting a worsening of financial performance”, according to the survey.

It said that the decline in financial performance is evident across a broad variety of industries.

“The entertainment and education and cultural services industries have managed to weather the storm so far and report improved financial performance, whilst all other industries report a worsening of financial performance over the last six months.”

The survey undertaken in September, noted that while the declines in construction, retail, wholesale and tourism related industries were to be expected, “it is somewhat surprisingly that the public utilities sector should report the most significant decline in financial performance.”

The survey is aimed at providing policymakers with timely and readily accessible information on the financial performance, investment outlook, as well as the local economic outlook as they relate to companies in Barbados and the OECS.

The results of f the survey are based on responses from 758 companies in Barbados, Antigua and Barbuda, Dominica, Grenada, St. Kitts and Nevis, St. Lucia and St. Vincent and the Grenadines.

According to the Department of Management Studies, the companies surveyed were also asked to indicate whether they expected a change in their financial performance in the next six to 12 months and that based on their responses, the majority of companies in St. Kitts and Nevis, St. Lucia, Dominica and St. Vincent “expect the decline in financial performance to continue for another six months, while a majority in Grenada, Barbados and Antigua expect financial performance to improve over the next six months.”

However, the majority of companies in all countries expect financial performance to improve within a year.

“All industries, except for public utilities, expect financial performance to improve within a year, but the slump is expected to continue for another six months in the crucial construction, and tourism sectors,” the survey found.

But regarding investment opportunities, the survey found that the outlook for the corporate sector in Barbados and the OECS is bleak over the next six to 12 months.

“The survey results indicate that the majority of companies have no capital investments of any form planned over the next six or twelve months,” it said, adding companies in St. Kitts have the most optimistic investment outlook over the next 12 months, while companies in Grenada have the most pessimistic outlook and St. Lucian companies the most pessimistic.

In evaluating the employment opportunities, the survey said that the majority of companies in Barbados and the OECS expect the level of employment in the corporate sector to remain unchanged or increase slightly over the next six months.

“This suggests that companies do not plan major layoffs, despite the fact that they have experienced worsening financial performance over the last six months, and expect financial performance to continue to worsen over the next six months.

“Companies in St. Kitts and Nevis and Barbados are the most optimistic about employment prospects over the next six months, while companies in St. Lucia and Grenada are the most pessimistic.  Across industries, companies in the financial and government services industries are the most optimistic about employment prospects over the next six months, while companies in the community /social/personal/services and, transportation/communication/storage are the most pessimistic,” the survey found.

Companies were also asked to indicate their outlook for the local and global economy and their responses suggest that they expect the local economy to remain largely unchanged for the next six months while having a positive outlook for the global economy.

Companies in Dominica, Grenada, and St. Kitts are the most optimistic about the prospects for their local economies over the next six months, whereas those in St. Lucia and St. Vincent are the least optimistic about the prospects of their local economies over the next six months.

In terms of the global economic outlook, the majority of companies in all countries expects the global economy to improve over the next six months, with companies in Barbados and St. Lucia being the most optimistic, while those in St. Vincent and Dominica the least optimistic.

“Companies in Barbados and the OECS appear to expect the economic slowdown to last for another six months at least, but they expected improvements in the next twelve months.  The prospects for improvement appear to be driven by an expectation that the global economy will recover in the next six to twelve months,” according to the survey.


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Category: Nevis Investments, Nevis News

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