Esteemed and experienced market researcher Dr. Don Anderson is forecasting storm clouds ahead for the Jamaican economy as the country prepares to go into 2025.

As the special guest speaker at a Rotary Club of St Andrew North meeting at the Liguanea Club last night, he made a data-driven and insightful presentation.

Pointing to data provided by the Planning Institute of Jamaica (PIOJ) and the Business and Consumer Confidence Survey, he drew attention to the downturn in the economy.

PIOJ numbers reveal that in the Goods Producing Industry sector for the third quarter of 2024 compared to the same period in 2023, there was a decline of 6.5 per cent.

For the period July to September 2024, mining & quarrying was down 15.2 per cent. Agriculture, forestry, & fishery are down 13.5 per cent. Construction is down 2.8 per cent and manufacturing is down 2 per cent. Overall, this spelt a decline of 6.5 for the goods producing industry sector. 

During the quarter under review, the Jamaican economy fell by 2.8 per cent. These figures go into the GDP calculation.

Looking at the services sector, the story remains a grim one.

Here, electricity and water supply were down 5.8 per cent. Transport, storage, & communication are down by 2.8 per cent with hotels & restaurants declining by 2.1 per cent. Wholesale & Retail Trade was down by 4 per cent. The only segment that didn’t move down was Finance & Insurance Services.

Dr. Don Anderson said, “When we look at the two pillars that actually generate the movement in the economy, both those pillars fell during the third quarter of 2024 compared to the third quarter of 2023.

“Looking at data from the Consumer Confidence Survey I presented to the nation in October of this year, we interviewed 100 businesses and over 600 people. We asked the question, ‘How do you feel about the economy? Is it going to get better over the next 12 months? When looking over the third quarter of 2024, 24 per cent of the over 600 people who participated in the survey said the economy will get better. That compared to the second quarter of 2024, where 26 per cent said it is going to get better. So there are fewer people who believe the economy is going to get better.”

Dr. Anderson then looked at the five reasons why the economy will get better. This is what consumers told him.

1. Entrepreneurship is on the rise.
2. The economy is showing signs of improvement.
3. A new investment is coming in. 
4. Optimism 
5. Growth in some sectors.

More consumers thought the economy would get worse in 2025, with 35.1 per cent believing that was the case in the third quarter of 2024 compared to 29.2 per cent in the second quarter of 2024.

So why do they think the economy is going to get worse?

The reasons were: 

1. The high cost of living
2. The government is not assisting enough.
3. Lack of employment (how can that be?) Jamaica now has the lowest unemployment in its history.
4. Increase in crime.
5. Lack of disposable income.

This means one in every three interviewed believes the Jamaican economy is going to get worse over the next twelve months.

The researcher known for his polling work said that he has been monitoring prices to determine consumer behaviour over the last eight years.

He asked consumers, How do prices compare to last year? As many as 72 per cent said there has been a significant increase, with 23 per cent saying prices had increased moderately. Just 4 per cent said prices have remained the same, with 1 per cent believing it had decreased moderately.

Therefore, 95 per cent of those surveyed said prices had gone up. Most Jamaicans are of the view that crime and violence are major problems in this country. And this is borne out in Dr. Anderson’s work.

He asked what is the most critical issue facing the country right now? As many as 62 per cent of the people he interviewed said crime and violence. The next highest at 9 per cent was unemployment. Poverty came in at 9 per cent with 3 per cent of people interviewed saying education issues. Three per cent said corruption & favoritism. Just 2 per cent said road conditions.

As many as 72 per cent said crime and violence in Jamaica are going to get worse.

This is worrying

The Jamaican economy is heavily reliant upon remittances.  The peak of inflows of remittances in Jamaica was in 2016, with 38 per cent of Jamaican households getting money this way. According to a Dr. Don Anderson chart, between 2011 and 2020, an average of 33 percent of all households received remittances, mainly those in the lower socio-economic brackets, which are the most vulnerable in the Jamaican economy.

From 2021, it fell to 29 per cent and hasn’t moved beyond 30 per cent since. For Q1, Q2, and Q3 of this year, it is just 28 per cent of all households.

Remittance inflows have fallen by 6 per cent from 2020 to the present.

“This means there is a significant shortfall in people being able to meet their daily expenses. What percentage of those remittances are used for savings? Very little. A large percentage of disposable income from remittances goes to meeting daily expenditures. That’s a critical piece of finding 
“This means that at a time when people are sceptical about the economy, prices are rising significantly, and at the same time, people are getting less and less money in their pockets from remittances to offset that. 

“It is a major problem faced by Jamaican consumers.”