IN most quarters the Jamaica Debt Exchange (JDX) has been considered a success and together with the devaluation of the Jamaican dollar and benign inflation, management of the economy has been viewed as an area that the government can be proud of its accomplishments.

However many businesses cite a contraction of the economy and a lack of consumer demand as factors that belie optimistic headlines in the newspapers. The recent slew of financial results seem to bear this out.

GraceKennedy’s net profits plunged 33 per cent during the three months ended June 2010 when compared to the corresponding quarter in 2009, as all its divisions except retail and trade, saw a decline in profit.

The Group reported a net profit of J$540 million for the June quarter, compared with J$801 million for the same period last year.

Explaining this drastic profit fall GraceKennedy’s Chairman and CEO Douglas Orane said: “The performance of the Group was impacted by continued weak consumer demand, lower interest rates following the JDX and the rapid appreciation of the Jamaican dollar.”

Another conglomerate, Lascelles deMercado also saw its profits tumble precipitously. For the three month period ended June 30, 2010 Lascelles net profit came in at a disconcerting J$363 million when compare to the J$1.39 billion posted for the same period in 2009.

“Since January 2010, many of our businesses units have experienced a decrease in sales quantities compared to the previous year. In general, the Group’s results have been negatively by the downturn in the economy as evidenced by a decline in consumer demand and consequently a reduction in sales quantities,” Lascelles Group Financial Officer Janene Shaw said.

Drinks behemouth, Red Stripe profits have been very parched this year and it has had to resort to redundauncies to stem its rising operating costs.

Higher cost of sales and lower production volumes resulted in a 35 per cent decline in Red Stripe’s net profit to J$716 million for the nine months ended March 31, 2010.

Red Stripe’s chairman Richard Byles said: “Any redundancy decision is always regrettable, but I am comitted to leading a business that can survive tough times by doing what is right to maintain the long-term viability of the company for all the employees and stakeholders and that means downsising our operation to reflect today’s business imperatives.”

Red Stipe’s managing director Al Barnes further added, “that the challenges posed by economic conditions and the competitive environment have pushed the company to examine its ” business model now to stop the performance decline and adjust to deliver long-term business sustainability.”

The country’s largest life insurer Sagicor Life Jamaica also put in a lack-lustre performance for the June quarter, seeing a 28 per cent deline in net profits which for the period under review came to J$1.1 billion. It also saw its total revenues fall to J$6.1 billion, a 25 per cent drop. Sagicor’s subsidiary Pan Caribbean Financial Services has seen a 38 per cent fall in profits. In his note to sharaeholders, CEO Donovan Perkins indicated that lower yields on the company’s investment securities portfolio as a result of the JDX and foreign currency translation losses following the revaluation had negatrively impacted the company’s income.

All these major companies appear to be singing from the same hymn sheet. With consumer demand down, unemployment rising and the JDX initiative sucking out over J$80 billion from the economy, something has to be done to stimulate aggregate demand.

Speaking earlier this week at the Jamaica Observer, the chairman of Sandals Resorts International, Gordon”Butch” Stewart made the point that the government should now endeavour to create an environment that will see increased consumer spending and a feel good factor so that Jamaicans can feel better about the direction their lives are going. He was of the opinion that government policy in conjunction with private sector initiatives would serve as a springboard to creating aggregate demand.

Half way into the year, many busineses are not seeing the demand and are saying that the revaluation of the Jamaican dollar is in fact not due to the strengthening of the currency as a result of a buoyant economy but rather to a lack of demand for US dollars as people are not buying.

One businessman told Caribbean Business Report that last year he was taking in J$3 million everyweekend with his average spend coming in J$1000 per per person per night. Today his weekend takings are down to J$600,000 with his average spend reduced to just J$300.

“People just do not have the disposable income and are uncertain about what the future holds. This means that they are just not spending and are playing it safe, ” he said .

Stewart made it clear that the government has to take the bull by the horns and ensure that there is a bounce in the economy and that austerity does not become the order of the day. Measures have been taken that appear to be taking place but ordinary Jamaicans – one and all want to see that uptick in the economy translate to more dollars in their pockets.

The country’s largest life insurer Sagicor Life Jamaica also put in a lack-lustre performance for the June quarter, seeing a 28 per cent deline in net profits which for the period under review came to J$1.1 billion. It also saw its total revenues fall to J$6.1 billion, a 25 per cent drop. Sagicor’s subsidiary Pan Caribbean Financial Services has seen a 38 per cent fall in profits. In his note to sharaeholders, CEO Donovan Perkins indicated that lower yields on the company’s investment securities portfolio as a result of the JDX and foreign currency translation losses following the revaluation had negatrively impacted the company’s income.

All these major companies appear to be singing from the same hymn sheet. With consumer demand down, unemployment rising and the JDX initiative sucking out over J$80 billion from the economy, something has to be done to stimulate aggregate demand.

Speaking earlier this week at the Jamaica Observer, the chairman of Sandals Resorts International, Gordon”Butch” Stewart made the point that the government should now endeavour to create an environment that will see increased consumer spending and a feel good factor so that Jamaicans can feel better about the direction their lives are going. He was of the opinion that government policy in conjunction with private sector initiatives would serve as a springboard to creating aggregate demand.

Half way into the year, many busineses are not seeing the demand and are saying that the revaluation of the Jamaican dollar is in fact not due to the strengthening of the currency as a result of a buoyant economy but rather to a lack of demand for US dollars as people are not buying.

One businessman told Caribbean Business Report that last year he was taking in J$3 million everyweekend with his average spend coming in J$1000 per per person per night. Today his weekend takings are down to J$600,000 with his average spend reduced to just J$300.

“People just do not have the disposable income and are uncertain about what the future holds. This means that they are just not spending and are playing it safe, ” he said .

Stewart made it clear that the government has to take the bull by the horns and ensure that there is a bounce in the economy and that austerity does not become the order of the day. Measures have been taken that appear to be taking place but ordinary Jamaicans – one and all want to see that uptick in the economy translate to more dollars in their pockets.

” The government must create the policies, whether it is for financial sector, the agricultural sector, the manufacturing sector, the transport sector, the tourism sector that sees the country performing better. When each of these sectors are working individually the other sectors get a boost and perform better. This can only be good for the man on the street becaus all of a sudden you see him build another room on his house, he buys a new car, purchases a new television or fridge and money starts to go around, ” Stewart said at the Jamaica Observer headquarters located on Beechwood Avenue, Kingston.