Confidence drops again in July: Danareksa survey<\/p>\n
JAKARTA (JP): The confidence of chief executives in the
\ncountry's economy declined in July by 1.3 percent to a level of
\n116 percent, according to the latest survey conducted by the
\nDanareksa Research Institute.<\/p>\n
The research agency said in a statement on Wednesday that the
\ndecrease was recorded in different types of companies and across
\nall sectors, with the mining sector showing the largest drop of
\n11.2 percent to touch its lowest ever level of 117.5 percent.<\/p>\n
The slide in business confidence coincides with the plunge of
\nthe rupiah and the Jakarta Composite Index (JCI) as well as the
\nConsumer Confidence Index (CCI) since March.<\/p>\n
Over the past four months, the rupiah, JCI and CCI have
\nplummeted by 12.6 percent, 18.5 percent and 14.2 percent
\nrespectively.<\/p>\n
While, at the same time, the business sentiment index slipped
\nby only 4.2 percent, the institute said.<\/p>\n
The decreasing trend in these factors were unfolded when
\ndomestic political tensions become more intensified.<\/p>\n
"The simultaneous happenings, with the slower pace of the fall
\nin the business sentiment index compared to the other three
\nfactors, suggests that businessmen are more resilient to
\npolitical volatility than portfolio players and consumers," the
\ninstitute said.<\/p>\n
The business sentiment survey was conducted by the institute
\nto investigate the assessment of top business executives on
\ncurrent economic and business conditions as well as their
\nexpectations for the next six months.<\/p>\n
The institute said business confidence in the credibility of
\nthe government was found to be continuously deteriorating, as
\nreflected in the drop of the index by 8.1 percent to 119.8
\npercent, its lowest level ever.<\/p>\n
The confidence index on the government's credibility in
\nmaintaining political and social stability plunged by 9.9 percent
\nto 121.1 percent.<\/p>\n
While the confidence index on the government's credibility to
\nuphold the law crashed to 101.3 percent after previously sagging
\nby 14.2 percent.<\/p>\n
The institute's survey also found that the business
\ncommunity's expectation index readings in July plunged to 128.5
\npercent from 131.4 percent in May.<\/p>\n
"Top executives' confidence in the overall outlook in the next
\nsix months continued to weaken," it said.<\/p>\n
Executives' responses recorded in the survey regarding their
\ncurrent business operations and financial performance and their
\nexpectations for the next six months declined in all sectors and
\nall types of companies, except agriculture and state-owned
\ncompanies.<\/p>\n
The sales expectations index fell for the third consecutive
\nmonth in a row and now stands at 154.7 percent, down 3.4 percent
\nfrom May.<\/p>\n
The survey also shows that less upbeat sales expectations were
\nmore uniformly shared across sectors and different types of
\ncompanies.<\/p>\n
The sales expectation index, however, improved slightly in
\nagriculture, mining and state-owned companies. (cst)<\/p>",
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