BANGLADESHI business confidence turns around Survey expects better growth in October- December period

Bangladesh's business community builds up confidence in a recovery hope in the global financial crisis, a study said yesterday. Business confidence was better in the third quarter this year, which is expected to be stronger in the fourth quarter (October- December). Prospects of new business opportunities that are rising gradually along with the recovery signs in the crisis-ridden global economies have helped build the business confidence in Bangladesh. Most of the firms are expected to post better profit in the fourth quarter, according to the survey. However, investment prospect remains same -- dull -- for the last quarter compared to the previous three months. Bangladesh Investment Climate Fund (BICF) and International Chamber of Commerce-Bangladesh (ICC-B) jointly conducted the survey among 778 different firms across the country through a face-to-face interview method. The responses were converted into a linear scale of 0-100. Of the 0-100 marks, over 50 means better, less than 50 means worse and 50 means unchanged. The survey said 91 percent firms expect better business in the fourth quarter. According to the survey styled 'Business Confidence Survey 2009 : Experience in July- September Quarter & Expectation for October- December Quarter', business confidence is expected to rise 65 percent in the fourth quarter, which was 51 percent in the previous quarter. The survey predicts 66 percent profitability in the last quarter, which was 52 percent in the July-September period. The anticipated employment generation for Q4 is 57 percent, which was 51 percent in the Q3. The investment index for Q3 and Q4 remains same at 52 percent. In the Q3 , the investment constraints what the survey identified for manufacturing and large- scale industry pushed down demands in the global market. Lack of business opportunity and funding were identified as investment constraints in Q3 for services sector and small and medium enterprises. However services sector and small firms were in a better position in the Q3 than large and medium manufacturing sectors. The businesses in these sectors are expected to perform better in the Q4 , anticipating a performance gain of 84-93 percent. Prof Wahiduddin Mahmud termed the growing business confidence as 'animal spirits' and said such psychological turnaround indicates something better in the future. "We, the business community, strongly feel that power generation and gas exploration should now be the top priorities of the government," said Mahbubur Rahman, president of ICC-B. However some businessmen differed on some findings of the survey. Referring to the negative export growth and reduction in import of capital machinery, Aftab Ul Islam, chairman of SME Foundation, said: "I don't think we will able to do something that we never saw before." Mustafa K Mujeri, director general of Bangladesh Institute of Development Studies, said: "It's time to adopt a comprehensive policy for developing confidence among the businessmen." James Crittle, head of BICF, said business environment must be improved. The government should take steps to boost confidence among businessmen. "Rising business confidence means rising investment that creates job opportunities," said Crittle at the programme at Dhaka Chamber of Commerce and Industry auditorium. Commerce Minister Faruk Khan also spoke at the event.