Business confidence up in Q3: BPS
Business confidence up in Q3: BPS
The Jakarta Post, Jakarta
Business confidence throughout the country improved during the
third quarter from the previous quarter, the Central Statistics
Agency (BPS) reported on Friday.
The agency said the business index for the July-September
period rose to 111.36.
"This indicates that business conditions in the third quarter
were generally better compared to the second quarter," the BPS
said in its latest quarterly business confidence survey.
The agency said improving business confidence was primarily
the result of three factors: higher operating revenue, higher
production capacity and an increase in the utilization of labor.
BPS also said that the business confidence index could improve
further in the fourth quarter on expectations of rising orders
from the domestic and overseas markets, and a continued increase
in the sale price of goods.
The business confidence index is an important tool for
determining the appetite of the business sector for making new
investments, a crucial factor in economic growth.
While investment has lagged over the past several years due to
the deteriorating investment climate at home, there are
indications of rising investment activity in the BPS' third
quarter economic growth report.
The BPS said the economy grew at a faster rate of 5.03 percent
in the third quarter compared to the same period last year,
partly due to a surprising 11.32 percent increase in investment
during the quarter.
The World Bank, however, has warned that despite signs of
increased investment, the government needs to push ahead with its
economic reforms and continue improving the investment climate.
The economy over the past several years has grow at an average
of 4 percent per year. Growth has been mainly driven by higher
domestic consumption, as investment and exports have been weak.
The new government of President Susilo Bambang Yudhoyono has
vowed to repair the domestic investment climate, generate
economic growth of more than 6 percent per year and help resolve
the country's chronic unemployment problem.
Elsewhere, the BPS also said the consumer confidence index
during the third quarter improved from the second quarter, mainly
due to higher household income and stable consumer good prices.