PRIVATE SECTOR LAYOFFS may become inevitable if recessionary conditions continue well into 2012.
This is according to Barbados Chamber of Commerce & Industry president Andy Armstrong, who said this was the stark reality despite a commitment made almost four years ago to sustain employment “at all costs”.
So far, he said, the private sector had for the most part kept its promise although this meant putting new investments on hold and watching profits shrink or disappear.
“Many companies – especially small and medium ones – are not in a position to hold [on] for much longer.
“I think that many people still don’t fully appreciate the duration or the severity of this recession and the impact it has had on reserves in companies,” Armstrong told BARBADOS BUSINESS AUTHORITY.
The managing director of Armstrong Agencies said the private sector was “split” about prospects for 2012 but the majority of businesspeople expected the coming year to be characterized by fragile growth and a challenging environment, much like 2011.
“Demand is down in most areas as consumers cut back their expenditure and enterprises cut back or defer spending.
“At the same time many costs have risen, especially in relation to energy. Fuel surcharges for shipping have been increasing, the cost of fuel for vehicles and equipment has risen, and the cost of electricity is much higher than it has been historically.
“It is very difficult to pass on these increases to consumers and so, many companies are in the position where they are making little or no profit,” he explained.