Despite COVID-19, crime the most critical issue facing Jamaica, JCC survey reveals

Business

Despite COVID-19, crime the most critical issue facing Jamaica, JCC survey reveals

Business and consumer confidence continue downward trend

BY ABBION ROBINSON
Business reporter
robinsona@jamaicaobserver.com

Wednesday, October 21, 2020

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Despite the central bank's projection that the economy will contract by between seven and 10 per cent during the 2020-21 fiscal year due to the impact of the novel coronavirus pandemic, local businesses have again said that the number one problem the country faces at this time is crime, according to the latest findings of the Jamaica Chamber of Commerce (JCC) business and consumer confidence indices.

The survey, presented yesterday by pollster Don Anderson, said that while health issues related to COVID-19 were considered major (28 per cent), 32 per cent of businesses indicated that crime and violence is the top problem.

Based on the Jamaica Constabulary Force's year-to-date serious crime data, as at September 26, 2020 the country recorded 3,762 serious crimes — 384 less than the previous corresponding period. Serious crimes comprise murder, shooting, rape, robbery, and break-ins.

Meanwhile, 15 per cent of firms believe that the Government, in its focus on economic recovery, should give top priority to managing the public health issues associated with COVID-19.

Another 15 per cent are eager to see efforts being made to stimulate business activities through adjusting curfew hours, stimulus packages, balancing living with COVID-19, and a reboost of the farming sector.

Business confidence in the third quarter of 2020 was 109.2 points, down from 115.4 in the second quarter, while optimism about future business conditions also declined to 109.2, compared to the 121.3 recorded in Q2.

Concerns around the climate for investment/expansion as well as the performance in firms' profitability being worse than expected are the main drivers of this decline. While these concerns are consistent with those expressed in the fourth quarter of 2019, the extent of the concern was amplified due to the effects of COVID-19.

Revenue loss remains the most widespread effect of COVID-19, with 62 per cent of firms indicating such — six percentage points lower than the second quarter — while 12 per cent of businesses reported difficulty in collecting receivables.

Anderson reported that while the early phase of the pandemic did not appear to impact businesses' expectations of the economy as an increase in the index was reported in Q2, expectations dropped from 140 points to 135 points in Q3.

Loss of staff (17 per cent) and greater reliance on technology (13 per cent) are changes that firms have experienced since the pandemic.

Despite this, almost half of the firms (46 per cent) are very confident their business will survive COVID-19, while six per cent are not convinced their businesses will, and 13 per cent are sitting on the fence.

Optimism among consumers continued its downward trajectory with 130.3 points in the period under review — the lowest recorded since the fourth quarter of 2015.

Consumers' expectations about the future of the economy declined from 175.2 points recorded in Q2, to 127.8 points.

The results showed that consumers' pessimism about the future economy is driven by their fears about the impact of COVID-19, as 65 per cent of consumers anticipate that the economy will get worse over the next 12 months.

Consumers' views of current jobs index moved slightly upward from 25 points in the second quarter to 28 points in Q3. However, there is no expectation of a positive change in the future for jobs as this index declined from 139 points in Q2 to 93 points in Q3.

Expectations for income gains dropped further with 50 per cent expecting no change in their income over the next 12 months. This resulted in a decline in the index to 103 points in Q3 from 126 points in Q2.

In fact, 14 per cent of businesses indicated that unemployment is the third-most pressing problem facing the country.

The survey also showed that the number of people who claimed to be receiving remittances is up 37 per cent from 33 per cent in 2019. Anderson pointed out that there was a direct relationship between the JCC survey's remittance results and a recent Bank of Jamaica study.

“What has been identified is that the value of the remittances have gone up… it [also] reflects in this particular piece of data where four percentage points more in 2020 are now claiming to receive remittances from overseas, despite the difficulties in the economies from which we mainly get remittances — the US, UK and Canada,” Anderson explained.

“This probably explains the kind of resilience that consumers are showing in terms of their own ability to face the challenges that are being presented by COVID-19, on top of all the other challenges that they had before. [This] helps them to offset their daily household commitments,” he continued.

The top three survival strategies for consumers during COVID-19 are adhering to the prevention protocols, 'hustling' and starting a new business. Consumers who intend to start a business will fund it primarily from their own savings (51 per cent), but many will also be looking to the financial institutions for a loan (20 per cent). Support from family and community partner plans were also mentioned (12 per cent).

When asked to indicate the most important thing the Government should focus on, consumers rated controlling the spread of the virus, the health of the people, health education, and exercising border control.

Conducted by Market Research Services, Anderson explained that the index is derived from quarterly surveys of CEOs and senior officers of approximately 117 Jamaican firms, and 660 consumers islandwide.


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