The Business Observer shares with its readers some of the results of a recent Jamaica Manufacturers and Exporters Association survey results on the impact of the COVID-19 pandemic on Jamaica's productive sector.
JMEA Productive Sector COVID-19 Impact Survey Results `
FALLOUT ON THE SECTOR
59 per cent - considering temporary or permanent closure of business.
51 per cent - temporarily reduce staff (14 per cent laid off 20-50 per cent of staff).
48 per cent - reduced the working hours of employees.
50 per cent - reduced production due to lower demand.
67 per cent - experienced a reduction in cash flow.
24 per cent - indicated an inability to make loan repayments.
59 per cent - experienced a fallout due to closure within the tourism sector.
OPPORTUNITIES ARISING FROM COVID-19
57 per cent - received new business opportunities from the crisis (export and essential sanitation items).
22 per cent - started producing new products, for example, masks and sanitisers.
WHICH SECTORS HAVE BEEN RESILIENT
•Food and Beverage, B2C has increased. B2B has struggled.
•Pharmaceutical
•Chemicals, for example, production of hand sanitisers and other cleaning agents.
•Textile and apparel industry, for example, production of face masks.
•Paper products, for example, toilet paper, paper towels, among others.
OPPORTUNITIES
I. Exports to new markets afforded by global supply chain disruption.
II. New product lines, especially natural products agro-based products.
WHICH SUBSECTORS ARE STRUGGLING?
Sectors with key product lines that are sold to:
I. Tourism
II. Entertainment
III. Schools
WHEN ARE WE LIKELY TO SEE A RETURN TO PRE-COVID-19 LEVELS OF ECONOMIC ACTIVITY?
FACTORS TO CONSIDER
•Jamaica has had anaemic/negative growth even when the rest of the world was booming. Last recovery from a global recession took 10 years.
•Pre-COVID-19, lots of economic activities but no real economic growth. Consumption-driven economy with minimal value-added.
•Operating the same way we did will not give us a V-shape recovery. Radical change in economic base required with a heavy focus on value-added, productivity and export.
•Need service pillar and productive pillar together, not one or the other. Diversification will be a key driver.
•Containment of the virus is crucial to recovery speed; private sector need to be included as part of the solution.
•Most companies surveyed see Q4 2021 as likely date for stabilisation and 2023/2024 for pre-COVID economic activity level.
WHAT IS NEEDED NOW TO PROVIDE THE RIGHT KIND OF SUPPORT FOR MANUFACTURING?
1 - FOCUS, FOCUS , FOCUS
2 - Incentives for research and development (R&D).
3 - Capacity support to help micro, small, medium enterprises (MSMEs) to access available funds.
4 - Capability development to improve supply & quality of technical resources.
5 - Policy directives and support to drive export.
Source: Jamaica Observer