Stakeholders in the manufacturing and export sectors are optimistic that the economy will begin to rebound by September and are ready to invest in expanding their output.
President of the Jamaica Manufacturers and Exporters Association (JMEA), Richard Pandohie, tells shared that more than 40 per cent of the JMEA’s members believe that the economy will start to show recovery by the end of the third quarter of 2021.
He says that more than 33 per cent have indicated that they will increase spending to boost production.
He notes that the optimism is spurred by vaccine development, the easing of restrictions, and signs of recovery of tourism and hospitality, which will help to reduce the level of contraction of the industries.
Pandohie also shared that while the manufacturing and export industries were significantly impacted by the onset of the COVID-19, the sectors have not had the level of fallout that was initially anticipated.
“Overall, the manufacturing and export industries have shown resilience despite the challenges, and it is estimated that more than 90 per cent of the workforce employed to the sectors were able to retain their jobs,”
The JMEA President informs that the impact of the pandemic resulted in approximately 55 per cent of manufacturers and exporters experiencing cash flow issues, which affected their credit facility or ability to finance themselves.
“Similarly, due to extensive shortages of foreign exchange and bouts of high volatility, many manufacturers and exporters were unable to finance their debts or purchase enough raw materials,”
He notes that the small and medium-sized enterprises (SMEs) suffered the worst impacts of the pandemic.
“According to the COVID-19 Impact Assessment conducted by the University of the West Indies (UWI), small Jamaican businesses typically only have about one to two months of cash reserves. Such liquid reserves serve as critical buffers when businesses face significant reductions in revenue.
These companies also faced significant losses or decrease in the local market. Liquidity concerns are exacerbated by the difficulties that Jamaican firms have with accessing external sources of finance and moratoriums for already existing loans,”
he pointed out.