Despite recessionary gloom, companies fight back
Published: Monday | September 7, 2009
The international economic downturn and reces-sion in the world has made increasing inroads into the economic health and sustainability of the Jamaican economy. However, some industries are learning to cope even in these difficult economic times.
Reports indicate that there has been a sharp decline in areas of the economy. These include an increase in the number of jobless individuals since last year and the increasing number who are unable to meet loan commitments. There has also been a concomitant decrease in the number of personal loans in the first half of this year.
A sure indication of the gloomy economic outlook can be seen in reports which indicate that during March of this year, the stock of personal loans fell well below levels measured at the end of the previous quarter. There is the first real decrease in this sector in five years. (Sharp economic down-turn led to first decline in personal loans in five years, 2009) The figures bear out gloomy predictions for future growth. The Bank of Jamaica's Quarterly Monetary Policy Report for the three months ending March 31 indicates that stock of private-sector credit expanded by $9.3 billion or 4.3 per cent during the review quarter relative to an increase of 6.3 per cent in the December 2008 quarter. Other sections of the economy have also shown a decline - for example, the manufacturing industries have shown a reduction in loan balances.
One could go on to elaborate on these gloomy economic forecasts. For instance, there was a significant decrease in car sales in March this year, compared to the first quarter of last year. However, despite gloomy prognostications, there are signs that sectors of the economy are in the process of fighting back. This can be seen in the communications and adver-tising industry - probably an area that has been hit the hardest by the global economic slump. As Yvonne Grinam-Nicholson wrote in a recent article, "Companies and communications professionals have to find practical ways to cope, to produce positive results on meagre budgets which are still being mercilessly slashed. And so we are increasingly being forced to do so much more not only with less but with imaginary resources".
One of the ways that this resurgence in the industry is being achieved is largely through the use of innovative thinking and the Internet. This refers to the 'explosion' of social media and social networking website. Social networking is becoming a means of communication and interaction with an increasingly active client base. This has helped the industry in times of tight budgetary constraints.
Companies have also begun to learn ways of positioning them-selves on the Internet through more customer interaction and networking which is a relatively cost-effective process. In general, Jamaican com-panies are showing an amazing resilience to the global economic down-turn. There are a number of companies that have been posting profits despite the international gloom. These successes have been ascribed to the resilient nature of many Jamaican enterprises. A good example is a company like Grace-Kennedy. The revenues from this company increased by $910.4 million in the first quarter of this year, compared to the same period in 2008. Other companies that have also bucked the trend include Pan Jamaican Investment and Jamaica Producers.
Besides, the use of Internet marketing, other factors have contributed towards the positive results in areas of the Jamaican economy. One of these factors is that the global recession has, in fact, motivated companies to become leaner and more stream-lined. This has also resulted in a re-evaluation of policy and practice and the implementation of more efficient methods in production and service delivery. In this sense, the present crisis has meant that many companies have learnt new ways to be more competitive and this has been assisted by networking and the Internet.
The online word has also forced companies to understand their target marker in more depth and the importance of segmentation and learning about the actual needs and requirement of the customer.
Winston Adams is the president of the University College of the Caribbean. Feedback may be sent to email@example.com.