Confidence appears to be growing that Bermuda’s economy is headed in the right direction — among consumers and business leaders alike. That conclusion can be drawn from the HSBC Business Confidence Index, details of which were released this week by Total Research Associates.

TRA found that consumer confidence was at its highest level in eight years, while more than two thirds of the 98 business leaders who took part in the June-July survey said they thought the economy was in better shape now than a year ago and expected the improvement to continue over the coming year.

That is heartening news for the Island, given the crucial role that confidence plays in economic recovery. With consumers, confidence in the economy may indicate a measure of certainty in their income stability and job security. A more confident consumer is likely to spend more, generating more demand in the economy.

When business leaders feel confident in the economy, they’re more likely to invest in their businesses, hire employees and raise pay, all feeding into the virtuous circle that leads to economic growth.

While the survey was encouraging, its findings did not suggest a return to the boom times is around the corner, particularly with regard to employment. Many employers had frozen salaries, left vacant positions unfilled and were going through the process of workforce restructuring as a way of responding to the challenges of a tough economy.

Most businesses that have survived the past six years of recession have done so by becoming leaner and more efficient, increasing their productivity, improving their marketing and managing their inventories better. They have evolved into tougher competitors through necessity.

For their managers to change their mindset from one of relentless cost-cutting to preparing for expansion will require a stronger level of confidence in the economy that exists now. What responsible business manager or owner, having grimly battled through the recession by paring down operations to the bone — with all the pain that brings — would start hiring again before being absolutely convinced that increased demand for their products and services was in the pipeline?

Retail sales, which have increased for eight consecutive months, year over year, suggest demand is indeed increasing in certain sectors, at least. A spike in vehicle sales this year indicates that many people have felt confident enough to replace their car, bike or van, perhaps after putting off this big-ticket purchase in recent years.

Likewise, anecdotal evidence points to an increase in investment on property maintenance and renovations. As Robert Moulder, the general manager of Bermuda Paint, told this newspaper last month after his company reported a net sales increase of 15 per cent for the year through March: “The economy is growing to where people are now willing to invest money into their homes.”

Mergers in the reinsurance and telecoms sectors, in particular, may be a headwind for job creation prospects, but imminent big building projects, with the new hotels hopefully close to breaking ground in St George’s and at Morgan’s Point, as well as the plans for a new airport terminal, should give the long-ailing construction industry a powerful shot in the arm.

Another economic confidence booster came with the truly spectacular events of last weekend, when the Island rose magnificently to the challenge of hosting the Louis Vuitton America’s Cup World Series. From international businesses to the stallholders who enjoyed some brisk business on Front Street, the event was hailed as a success. Hosting the event has already put money in the pockets of many Bermudians, with the teams and organisers, their families and entourages based on the Island, consuming goods and services. This will continue over the next two years.

Last weekend should have cleared up any doubts, for those who needed convincing, about the power of the America’s Cup as an attraction for visitors and Bermudians alike, as the concept of hosting this major world sporting event became reality. Bear in mind this was merely an appetiser ahead of 2017’s main course, when it will not just be a couple of days, but a month-long sailing extravaganza that will be served up.

It is not only the dollars generated by last weekend’s event that inspire confidence, but also the way the Island shone. Despite Saturday’s uncooperative weather, the show went on without a hitch. Logistically, aesthetically, commercially and sportingly, it was superb.

Any prospective tourist who watched the sailing on television, the course ringed by an impressive flotilla of boats packed with thousands of spectators in the uniquely beautiful setting that Bermuda provides, would surely be more likely to want to visit the Island than before they started watching.

Similarly, any of the businesspeople who were here for the fun — especially those visiting for the first time — could not fail to have been impressed by the smoothness with which the event ran. Not only would they have seen a beautiful island, but also a place capable of running a massive event like clockwork, despite its small size. That can only have enhanced the Island’s reputation as a place for doing business and made those visitors more likely to turn to Bermuda if they are looking to set up a business offshore.

The benefits from such perceptions, while difficult to measure, could prove to be considerable and long-lasting — and a confidence booster for consumers and businesses alike.