'Business sentiments improve'
The Jakarta Post, Jakarta
The country's business players are looking to the future with increased optimism as business sentiments have improved thanks to the restoration of security and order, a consultancy firm said.
Danareksa Research Institute, citing its February-March survey, said the business sentiment index rose 1.1 percent to 110.2 in the survey period, while the expectation index climbed to 120.2 from 119.0.
The present situation index (PSI) rose from 99.1 to 100.1 to mark a shift into positive territory, it said.
Optimism has now sprung among the country's business players after their sentiments dived following the Sept. 11 terrorist attacks on the United States and the floods that severely hit Jakarta and other parts of the country, as well as the high inflation in the first two months of the year, it said.
Sentiment on current performance -- sales, profits, production, liquidity and capital spending -- was all sanguine, as the rebound of sales turnover, both in sales volume and prices, reinvigorated investor sentiment.
Business began functioning again at a greater intensity to catch up with the missed yearly target, with all measures that assess business prospects over the next six months standing in support of a sound outlook.
The restoration of order and security gave optimistic views for any enterprise to function properly.
Irrespective of the improved sentiment on the government to restore order, doubts over its ability to sustain the momentum remain, as the index measuring confidence in the government slipped to 106.1 from 107.2, the agency said.
The rising prices of stocks, the rupiah and goods, have encouraged entrepreneurs to invest in illiquid products, a precursor to a revival of the economy if the cycle is not broken by any frightening event.
"It is the government's responsibility to prevent the recurrence of any confidence-shaking event that may shock businessmen," the agency said.
The increase of purchase orders from one company to another marks an upturn in business developments and has originated from robust consumer spending in the aftermath of the flooding and soaring inflation.
Consumers have injected additional amounts of cash activating the flow of goods from retailers to wholesalers, before later placing orders with manufacturers as orders deluge traders.
Manufacturers have regained faith in the ability of their plants, not only in making better use of their existing machines and employees, but also in enlarging their scale of operations.
As such, the self-justifying cycle of confidence and liquidity have kept rolling to spark the liquid markets of stocks and currencies.
The survey includes more than 700 chief executives or directors representing a wide variety of leading companies in the following sectors: construction, agriculture, finance, transportation and communication, manufacturing, hotel and restaurant services, mining.