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Jamaican Consumers Upbeat, Despite Recession

Jamaican consumers remain largely optimistic about the economy for 2009 in spite of the continued global recession and the increasing threats of job losses since the start of the year, as local business activity contracts.

According to the Jamaica Chamber of Commerce (JCC) fourth-quarter 2008 Business and Consumer Confidence survey, local consumers expected their living standards to remain favourable this year.

The report, which was released yesterday, states that although the Consumer Confidence Index fell five per cent over the last quarter of 2008 when compared to the preceding quarter, Jamaicans have not adopted a pessimistic outlook as confidence level is still more positive than it was from early 2001 to 2006.

While consumers judged the current state of the economy more negatively than the third quarter 2008, these downbeat assessments did not cause pessimism about future economic prospects, the JCC report said.

One third of all consumers at the close of 2008 felt that the economy had worsened up from one in four at the staf of the hearent over the last quarter of 2008 when compared to the preceding quarter. At the same time, the proportion of consumers that had anticipated better conditions reained largely uncchaged, the reportstard, Jamaicans have not adopted a pessimistic

However, Professor Richard Curtin, head of survey research unit at the University of Michigan, sees the optimism as somewhat surprising given the global economic slowdown and Jamaica's dependence on tourism and remittances.
"Consumers do not expect the kind of slowdown in the economy that I think is going to happen," Professor Richard Curtin told businessmen yesterday during his analysis of the report held at the Terra Nova All-Suite Hotel in Kingston. "The threats are more serious than consumers realise," Curtin remarked, adding that the current US recession was the longest on record."I think Jamaica will join us in that recession in 2009," he argued.

Curtin said, however, that Government retained substantial credibility to implement economic and social reforms in response to the crisis."We don't want to have a situation where consumers are faced with a downturn they did not expect," he said.But even while local consumers are expecting no real decline in their living standard this year, their job prospects for 2009 were dim. Forty-eight per cent of consumers in the fourth-quarter survey expected the job situation to worsen.

"The lack of jobs and the impact of globalisation represent the most negative aspects of government economic polices mentioned by consumers," the report said."Consumers voiced greater disappointment with the current job situation as 84 per cent reported that jobs were now in short supply, the worst reading in two years".Interestingly, while the country experienced jitters about lay-offs and redundancies, the report also showed that income gains were expected to increase.

"Remittances were anticipated by a larger share of the population but the size of the remittance was expected to decline," the report said. This lingering confidence of consumers is however not manifested in the local business community, which instead reflected a 22 per cent decline in the last quarter 2008 confidence index over the previous quarter. Source: jamaicaobserver.com

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