Business Outlook Index at end of 2025: Short-term strain, cautious optimism for the future

Despite highlighting statistics that more than half of executives polled reported worsened financial conditions in the last six months, and that confidence in the economy in the short term remains negative, businesses maintain a cautiously positive outlook for the future of the economy and their own operations.

This is according to the Business Outlook Index for the last quarter of 2025, compiled by the TT Chamber of Industry and Commerce in partnership with the Arthur Lok Jack Global School of Business, released on December 10.

“The Q4 2025 Business Outlook Index reveals a private sector navigating short-term strain but demonstrating guarded optimism over the medium term,” the chamber said.

The chamber took note of statistics that revealed that executives still remain uncertain about the positive impact of the new government.

“Overall, the data suggest that despite current pressures, firms are positioning for recovery and investment-led growth, albeit within an environment of domestic economic uncertainty."

Lack of business confidence

The business outlook said: “executives’ confidence in the financial performance of their organisations was mainly worse over the past six months.”

Further figures revealed that 54 per cent of executives reported a worse performance in their businesses over the past six months. An accompanying graph showed that only three per cent of businesses fared “much better” than it had been at the beginning of the year. A total of 43 per cent said they were doing better than at the beginning of the year.

A further breakdown of industries revealed that 25 per cent of accommodation and food-service businesses saw worse economic conditions while 75 per cent saw better (50 per cent) and much better (25 per cent) economic conditions.

Approximately 45 per cent of respondents in the construction industry saw better economic conditions in the past six months, while 36 per cent saw no change and 18 per cent saw worse conditions.

In distribution, more than 17 per cent saw much better economic conditions and more than 23 per cent saw slightly better conditions. More than 23 per cent of respondents said they saw no change in economic conditions in the past six months, while more than 17 per cent saw worse conditions.

In manufacturing more than half (54.55 per cent) saw better conditions while more than 36 per cent saw no change. A total of nine per cent of manufacturers participating in the survey said they saw worse economic conditions.

The energy sector saw the worst results with more than 66 per cent seeing worse economic conditions in the past condition, while 33 per cent saw no change.

Some outliers included the administrative and support services industries, for which 100 per cent of respondents saw better conditions. However, 100 per cent of respondents in the agricultural sector said it saw worse conditions.

With regard to the global economy, respondents said the six-month global outlook was negative, but had a more positive outlook on the global economy over the next year.

The outlook came amid confusion over what impact the government’s policies would have on the economy.

The chamber said the majority of respondents (24 per cent) said they were not sure which area would be positively impacted by the government’s policies.

A total of 17 per cent of businesses said enhanced public-private collaboration on national development would see a positive impact. Other businesses, about 16 per cent, predicted better access to foreign exchange, while 14 per cent expected improvement in the ease of doing business.

A total of six per cent expected improvement in safety and security and five per cent were expecting increases in incentives for the private sector.

Food and beverage sector hit hard by rum tax

The survey also looked at employment and the likelihood of sectors to hire in the next six months.

A tally of respondents showed that accommodation and food service had the highest likelihood (75 per cent of businesses) of hiring within the next six to 12 months.

However, that was before the 2025-2026 budget read on October 13 budget where Minister of Finance Davendranath Tancoo announced a 100 per cent increase in excise duties on alcohol, to boost revenue and address health concerns.

In light of the announcement the survey was re-distributed to assess the effect on the food and beverage sector. The results were significant.

After the announcement, 40 per cent said it was likely that employment would decrease in the next six months. About 60 per cent said there would be no change. For the 12-month period, 25 per cent said it would likely increase employment, 50 per cent said employment will decrease in the sector and 25 per cent said there would be no change.

“The results indicate that before the increase in alcohol and tobacco prices, the food services sector was more likely to increase hiring within the year. However, since the increase in prices, the possibility that the sector would increase employment has been reduced or there would be no change at least within the next six months,” the chamber said.

Meanwhile other sectors showed a higher likelihood of hiring over the next year. About 67 per cent of respondents in the real estate activities sector said they would likely hire more in the next six months to a year. About 63 per cent in the finance and insurance sectors said they would hire in the next six months while 38 per cent said they would hire in the next year.

The construction, manufacturing and distribution sectors were least likely to hire.

The chamber said while the employment outlook looked neutral overall in the near term, with a chance of it improving over the next year, showed that firms want to expand, but are delaying labour commitments until economic conditions become clearer.

Light at the end of the tunnel

The chamber said that while the outlook looks negative in the short term, anticipation of a turnaround suggests that businesses are looking forward to seeing light at the end of the tunnel.

“Businesses believe that challenges are cyclical rather than permanent,” the chamber said. “Many may be anticipating improved external conditions, including stabilising global markets, or hoping for more supportive domestic policy interventions.

The chamber added that the shift in the global economic outlook for the next year from negative to positive likely reflects expectations of easing global inflation, recovering demand for energy and manufacturing exports and improving logistical conditions.

“For a small energy-exporting nation like TT, improved global economic prospects often translate directly to better medium term business confidence.”

The chamber highlighted the uncertainty in the business sector with regard to the effect of government policies, saying it signalled a need for the government to communicate with the business sector.

It suggested strengthening public-private dialogue to reduce policy uncertainty and support for sector-specific adjustments following excise duty increases.