Higher employment boosts Christmas shopping - Cash transactions projected at $20b
Jamaica's positive economic developments, including what the Statistical Institute of Jamaica said is a decrease in unemployment, are believed to have contributed to a boost in consumer spending over the past weeks as at least one major business has reported an uptick in economic activity for the Christmas season.
Managing director of Ammar's Department Stores, Michael Ammar, says there has been a definite uptick in commercial activity, but as to the degree expected for the season, he says that is still an unknown for now.
"It's hard to answer that question at this point in time," Ammar told the Financial Gleaner, adding that he could offer a better take after Christmas Eve, the last day of shopping. Additionally, companies mostly issued bonuses to employees in the past week, which means there is more shopping to come.
"I get the feeling that the people who are shopping are buying more per person," he added.
Meanwhile the operator of the MultiLink network, JETS, is projecting that cash transactions for the month of December could surpass $20 billion, about 10 per cent to 15 per cent more than the November period, and that around $3 billion was likely to have been spent on the final weekend leading to Christmas Day.
In November, the MultiLink network supported about 603,000 unique debit-card users, who withdrew over $18.09 billion via 2.66 million transactions, said Edmundo Jenez, chief executive officer of JETS, in response to Financial Gleaner queries. Card users withdrew $9.81 billion from ATMs in 1.24 million transactions, for an average of $7,900 each, while point-of-sale activity amounted to $8.28 billion via 1.42 million payments, for an average $5,830.
Jenez said that in the past 12 months, about 1.4 million unique debit cards have been used at MultiLink locations by customers to obtain funds from their accounts. The network connects 749 machines distributed by the banks that are members of MultiLink.
However, the customer-usage rates - three to four times per month, on average - and the number of cards used online tell a story of growing engagement with electronic payments.
"We see [that] the number of card users, transactions and dollar amounts spent are all increasing," said Jenez. "Also important, more and more persons are receiving salary and other payments via electronic deposits directly to their accounts," he said.
Ammar says the uptick in shopping activity has been evident since Black Friday promotions at the end of November. The American retail event has been adopted by other countries and is now seen as the kick-off to the peak shopping season leading into Christmas.
"From what we saw during Black Friday, I would think there is an increase. I can't tell you how big or small it is without having the scientific figure, but I would tell you that I feel there is an increase," Ammar said.
As to what he would attribute the increase in sales compared with last year to, Ammar said: "Again, I don't have facts, but based on what I know, I mean, there is definitely an uptick in what is going on in the economy. You see businesses redoing and opening and that kind of thing, so I think there are more people working. That's what the labour force figure says, so I would agree with that. And I think people generally feel a little better about things, and when people feel a little better, they spend a little more," he added.
Jamaica's unemployment rate fell to a new low of 8.4 per cent in the October survey, with significant job gains seen among women and younger workers.
"I just hope it pans out the way that we think it's going to, and I encourage people to come out early rather than leave it to the last minute," added Ammar regarding business expectations.
The Bank of Jamaica, projects that the currency in circulation will increase by approximately $18.1 billion, or 16.5 per cent, to $128.1 billion by the end of December. That rate, the central bank said, is broadly consistent with the 16.5 per cent growth seen in December 2017.