In the last few days before Christmas, businesses are still reporting a decline in demand for goods when compared with previous years, but given that the economy has just returned to growth in the last quarter it has come as no surprise.
The low sales comes amidst a Bank of Jamaica (BOJ) report that projected demand for currency for the month of December, in real terms, is less than it was last year and reports from the Statistical Institute of Jamaica (STATIN) that imports have also declined.
The BOJ said a few days ago that it was yet to see the strong demand for cash which is usual during the Christmas holiday season.
"Most manufacturers are indicating that sales and demand are less than previous years," president of the Jamaica Manufacturers' Association, Brian Pengelley, told the Financial Gleaner. "Retail sales are slow right across the board," he said, adding that "it is what we were expecting".
Francis Kennedy, president of the Jamaica Chamber of Commerce, told the Financial Gleaner that the smaller need for cash was the result of the recessionary climate.
"First of all, the country is in a recession. There are people being laid off in the private sector. Everyone is being conservative. They are only spending what is required," Kennedy said.
"We did grow half of one per cent in the last quarter, but that was not much growth. People have just become ultra conservative. I don't think people are broke. They are just being ultra conservative," Kennedy emphasised.
President of the Private Sector Organisation of Jamaica, Christopher Zacca, said that "clearly, the fiscal climate has compressed demand as expected. For the economy to be really picking up, it is going to require more investment from the private sector and increased exports. We have seen some pick up in the last quarter which was nominal. ... This was expected. What we need to focus on now are the non-fiscal measures, including the reforms which will improve the ease of doing business, including tax reform and the reform of the public sector."
Zacca said the Government, in encouraging growth, also needs to address issues relating to crime. "We always have to keep our eyes on the fact that one of the primary roles of government is that of national security and justice, and that's a big concern for us at this point."
The BOJ has projected that during December, the stock of currency will increase by approximately $11.1 billion, or 19 per cent relative to end-November 2013. "This projection represents a slower pace of increase relative to the 19.2 per cent which obtained in 2012 and the five-year average growth rate of 19.7 per cent," it said.
Overall, the bank said it expects demand for currency to be strongest during the third and fourth weeks of December and is expected to peak at approximately $71.8 billion on December 24.
The bank said that "relative to end-December 2012, the forecast represents nominal growth of 7.3 per cent and translates to a projected currency stock of $69.4 billion at end-December 2013. When the change in the general level of consumer prices is taken into account, the projected demand for currency in real terms is 2.5 per cent less than the previous year."