A Central Bank survey of service providers and construction firms has confrimed that business sentiment worsened during the fourth quarter of 2008, possibly echoing concerns about recessionary conditions in trading partner countries.

In contrast with the September quarter, respondents on balance reported reduced turnover. A smaller proportion of them experienced an increase in costs, while the majority reported a decline in selling prices. Accordingly, a larger proportion indicated that profits were lower.

With regard to employment, the overall pattern changed from the previous quarters, with more firms trimming their labour complement than adding on to it. This notwithstanding, the majority still indicated no change in the size of their workforce.

For the first quarter of 2009, participants projected lower turnover and a number of them expected higher costs. The majority expected selling prices to remain unchanged, though more firms expected higher selling prices than lower ones.

With regard to their labour complement, the majority of respondents, particularly firms in the transport and storage and post and telecommunications sectors, expected to shed labour during the March quarter. For 2009, however, respondents planned to step up their capital expenditure and to expand their labour complement.