The Observer’s Sunday Finance shares with its readers the latest Jamaica Manufacturers and Exporters Association (JMEA) COVID-19 Impact Survey. 

The results of the survey were published last week.

GENERAL INFORMATION
• Jamaica Manufacturers and Exporters Association (JMEA) has a membership base of approximately 500 members, survey was done using 20 per cent of the base.
• The respondents that completed the JMEA COVID-19 Impact Survey were from 12 sub-categories of membership. 36.5 per cent of the companies are large; 22.2 per cent are medium-sized; 17.5 per cent are small; while 23.8 per cent are micro.
• 49.2 per cent were from the primary production/fresh produce and food and beverage subsectors; 4.8 per cent were from the professional services subsector; 4.8 per cent were from the packaging, printing and paper subsector; 6.3 per cent were from the textile, apparel and leather products subsector; 7.9 per cent were from the chemicals, cosmetics and pharmaceutical products subsector; 4.8 per cent were from the wood and furniture products subsector; 3.2 per cent from the electrical, electronics and optical products and jewelry and craft industries; the remaining 19 per cent was comprised other manufacturers
• 22 per cent advised that they have under five employees; 21 per cent have between six and 20 employees; 14 per cent have between 21 and 50 employees; 10 per cent have between 51 and 75 employees; two per cent have between 76 and 100 employees; 31 have over 100 employees.

SURVEY QUESTIONS
1. What adjustments have you already made, or strongly contemplated to alleviate the economic impact (if any) brought on as a direct result of COVID-19?
To alleviate the economic impact of COVID-19 on their company:
21 per cent of respondents permanently reduced staff
35 per cent temporarily reduced staff
44 per cent reduced working hours for employees
33 per cent restructured/renegotiated debt
21 per cent of respondents made no adjustments while 29 per cent employed other adjustments such as:
– Better manage expenses and contain costs
– Facilitate remote working
– Create new projects
– Increase sales team in offering improved service for customers
– Pivot product offering and diversify customer base
– Increase production

2. Are you currently experiencing supply chain disruption in purchasing input for production?
53 per cent of respondents are experiencing supply chain disruption in purchasing input for production, while 47 per cent are not.

3. Are you currently experiencing an impact on your finance/cash flow due to COVID-19?
68 per cent of respondents are experiencing negative impact on their finance/cashflow. The respondents that advised they were experiencing impacts stated:
49.2 per cent are experiencing a reduction in working capital
20.6 per cent are experiencing an inability to pay their loans
15.6 per cent are experiencing a reduction in access to capital
Among other impacts such as foreign exchange shortages; and profit reduction due to the devalued dollar.

4. Have you benefited from a moratorium for bank loans?
Only 25 per cent of respondents advised that they were able to benefit from a moratorium on loans.

5. What percentage of your staff continues to work from home?
49 per cent of respondents advised that none of their staff are currently working remotely
29 per cent of respondents advised that less than 10per cent of their staff are working remotely
8 per cent respondents indicated 10-20 per cent of their staff are working remotely.
3 per cent respondents indicated that 21-50 per cent of their staff are working remotely
11 per cent of respondents advised that more than 50 per cent of their staff are working remotely

6. Has COVID-19 caused you to reduce your staff complement?
56 per cent of respondents indicated that COVID-19 has caused them to reduce their staff complement.

7. If yes, by how much? (number of employees)
59 per cent of those companies reduced their staff by 1-10 employees,
22 per cent reduced their staff by 11-20 employees,
7 per cent reduced their staff by 21-30 employees,
6 per cent reduced their staff by 31-40 employees
6 per cent reduced their staff by 100 and above employees.

8. If you had/must lay off staff, when was/will this (be) done?
14 per cent of respondents laid off staff in March
13 per cent in April
10 per cent in May
9 per cent in June
6 per cent of respondents plan to lay off staff in the third quarter of 2020 (July-September)
7 per cent plan to lay of staff in the fourth quarter of 2020 (October-December)
41 per cent of respondents advised they do not intend to lay off staff

9. What is/are the greatest challenge/s that you continue to face (if you are operating remotely)? (check all applicable)
Based on the responses from the survey, 69.8 per cent of respondents advised they do not have staff working remotely from home or if they do, they are not facing any challenges. The remaining respondents advised that the greatest challenges the companies continue to face while operating remotely are:
• The availability of computers for 3 per cent of respondents
• Availability of telephones/cellular phones for 3per cent of respondents
• Software for 5 per cent of respondents
• High capacity Internet at worker’s homes for 15 per cent of respondents
• Qualification of staff for remote work for 8 per cent of respondents
• And other issues such as communication and coordination, access to paper documentation, and ability to meet demand when workers are unable to come into the factory

10. How long would it take for your business to close, whether temporarily or permanently, if the current business climate were to continue?
46 per cent of respondents advised that despite the current business climate they will not close.
22 per cent were unsure.
32 per cent of respondents indicated if the current business climate were to persist, they would close in just over 6 months.
What is your current production capacity utilisation?
13 per cent of respondents indicated that their current production capacity utilisation is in the range 0-20 per cent,
11 per cent of respondents are in the range 21-40per cent,
19 per cent of respondents are in the range 41-60 per cent
19 per cent are at 61-80 per cent
32 per cent of respondents are in the range 81-100 per cent.
6 per cent of respondents indicated they are not sure.

11. How has COVID-19 affected your sales revenue? (measured in percentages)
11 per cent of respondents recorded an increase in their sales revenue during COVID-19 by 1-25 per cent.
5 per cent recorded an increase in the ranges of 25-50 per cent.
5 per cent increased 50-75 per cent.
29 per cent of respondents recorded a decrease in their sales revenue during COVID-19 by 1-25 per cent, this was the largest group for all ranges.
2 5per cent, experienced a decrease in sales revenue by 25-50 per cent.
5 per cent of respondents advised of a decrease by 50-75 per cent
13 per cent, experienced a decrease by 75-100 per cent.
8 per cent of respondents did not experience any changes.

12. If you utilise e-commerce, how has COVID-19 impacted those sales? (measured in percentages)
Only 38 per cent of respondents utilise e-commerce to sell their products, of which 63 per cent realised an increased in e-commerce sales.

13. What has been the impact on your export of products/services? (measured in percentages)
24 per cent have seen an increase in exports.
6 per cent of respondents advised that the exports of their products/services were stable.
29 per cent of respondents reported that their exports decreased.
41 per cent of the respondents were not exporters.

14. Has COVID-19 impacted the price at which you purchase raw materials or other production input?
81 per cent of respondents indicated that the price at which they purchase raw materials or other production input have increased.
17.5 per cent indicated there was no impact while 1.6 per cent indicated prices have decreased.

15. Will there be any potential price adjustments to your finished product/ service?
51 per cent of respondents indicated that there will be a price adjustment to their finished product, while 38 per cent were unable to say.

16. If you supply the tourism/entertainment sector, what is the fallout resulting from the closure of hotels and other businesses in the sector? (measured in percentages).
65.1 per cent of respondents indicated that they supply the tourism/entertainment sector and experienced a decrease in sales to that industry, of this amount:
22 per cent advised that they encountered a 1-25 per cent fallout in sales.
8 per cent of respondents faced a 25-50 per cent fall out in sales.
19 per cent of respondents faced a 50-75 per cent fallout in sales.
16 per cent respondents faced a 75-100 per cent fallout in sales.

17. If you fall in the agriculture/agro-processing sector, are you still purchasing raw materials from local farmers?
89.3 per cent of respondents that fall in the agriculture/agro-processing sector are still purchasing raw materials from local farmers.

18. When do you think things will get better or the economy will recover?
3 per cent of respondents foresee the economy recovering in 2020.
10 per cent foresee the economy recovering in the Q1 2021,
21 per cent in Q2 2021
11 per cent in Q3 2021
13 per cent in Q4 2021
24 per cent, don’t see the economy recovery until 2022,
2 per cent doesn’t see the economy recovering until 2023.
16 per cent have no idea.

19. Do you have any intentions of borrowing funds soon to offset additional COVID-19 expenditure?
10 per cent have already borrowed funds to offset the damage done by COVID-19. 35 per cent of respondents intend to borrow funds soon while a further 35 per cent are unsure. The remaining 20 per cent will not be borrowing.

20. Will you be cutting back on capital expenditure/investment projects?
13 per cent of respondents have already cut back on investment projects, 35 per cent of respondents will be cutting back on investment projects while a further 24 per cent are not sure and 28 per cent said they will continue their planned expenditure.

http://www.jamaicaobserver.com/sunday-finance/Since-COVID-19