Political strife denting confidence
Political warfare is denting business confidence in Bermuda, a major survey of private-sector leaders has found.
The report said: “More than one third of business leaders feel that better Government leadership/political stability would positively impact the business climate in Bermuda.”
The business confidence survey showed 35 per cent of respondents wanted better Government leadership/political stability, while 21 per cent cited a need for improvements in immigration/work-permit processes and 19 cent wanted business development/growth/increased foreign investment.
A total of 14 per cent cited the need for a better tax system.
The news came in the Business Confidence Index Report, sponsored by HSBC, which saw a total of 220 survey responses, up 110 per cent on last year. The results were unveiled at HSBC’s Harbourview building yesterday.
Bermuda Chamber of Commerce president John Wight said that March’s protest against the pathways to status immigration reform bid had hit the island’s image.
Mr Wight added: “The thing business dislikes most is uncertainty and at the moment there is great uncertainty in the political arena.
“Communication is poor between the Government and population — what the island experienced in March shook the island big time.
“Business uncertainty really has to change before companies want to add more people to their payrolls or make capital investments.”
Mr Wight, who formed a panel at the event with HSBC chief executive officer Mark Watkinson, said that business could help politicians draw up a road map for future prosperity — and pointed to the think tank Bermuda First, of which he is a member, as an example.
He added: “Both political parties have to accept there are a lot of people in the community who want to assist.
“Regrettably, neither political party has taken us up. Neither wanted our support.”
Business confidence fell in the report for the first six months of this year, compared to the last six months of 2015.
The report said: “Business confidence has decreased over the past six months, down 3.4 points from 106.5 to 103.1, although it remains above the benchmark measure of 100 from 2014.
But the report added there was a marked difference between the views of local businesses and the international sector.
It said: “This decline in the overall business confidence index stems from a drop in confidence among businesses operating in Bermuda only, while international organisations express a greater degree of confidence.
“These results suggest worsened domestic economic conditions in Bermuda for the start of 2016.”
Confidence in the island’s economic future remained “moderate” the report said, with a little more than one in ten indicating a high degree of confidence — 13 per cent, down three points from the second half of last year.
But three quarters of those surveyed said they expected the island’s economy to improve over the next 12 months — up on previous surveys, despite the overall fall in confidence.
The report said: “Nonetheless, the majority remain conservative in their expectations, stating that the economy will only be somewhat better than its current status, while one in ten believe it will significantly improve.
“By contrast, two in ten expect little change in the coming year, while those forecasting worsened conditions are few and far between.”
The survey also said that the business world wanted to see more transparency and open communication from Government, along with immigration reform and improved immigration polices, as well as political stability and more cross-party co-operation.
The report added: “In line with the decline in business confidence, Bermuda business leaders are more critical of the future direction of the economy compared with the end of last year.
“Indeed, two thirds of business leaders believe that the economic direction is positive despite a notable decline in this regard since the end of last year.
“Meanwhile, a significant increase is observed in the opinion that the economy is not moving at all.
“On a positive note, those who feel that the economic direction is negative remain few and far between.”
A total of 66 per cent of those surveyed felt the economy was moving in a positive direction — down 13 points on the 79 per cent in survey for the last six months of 2015.
The number who felt the economy was stagnant rose from 19 per cent to 29 per cent.
And the number who believed the economy was going backwards rose from 2 per cent to 5 per cent.