Gareth Manning, Staff Reporter

Customers doing business at a Western Union outlet. In the wake of the current financial crisis in the United States if America, the projected annual growth in remittances to the island has fallen and is projected to take a further nose dive.

THE INFLOW of remittances into the island has begun to slow down as Jamaicans abroad try to cope with the contracting United States (US) economy.

While overall inflows are still above last years figures, remittance growth is below market projection of between 10 and 15 per cent for the January to August period. The growth to date is 8.8 per cent compared to 9.6 per cent for the same period last year, players in the market disclose.

Augusts remittances were even slightly below last years inflow for the same period, measuring a difference of US$700,000 or J$5.1 million.

54 per cent of market

Remittances from Jamaicans living in the United States account for 54 per cent of the market; the United Kingdom follows with just about 26 per cent.

The transaction is still there and increasing, but the average remittance is getting less, says general manager of Jamaica National Money Services Limited, Emile Spence.

So you find that people are spending less now and whereas somebody who used to send weekly, now just only sends twice per month in some cases, he adds.

The rate of remittance inflows might contract further as some analysts predict a depression in the US economy.

Share prices plummeted again last week and the value of European tenders fell hard shortly after the start of trading on Wall Street Thursday. The Federal Reserve also revealed last week that US industrial production declined 2.8 per cent in September, the steepest since 1974.

tightening funds

Managing director of Caribbean Immigrant Services in New York, Irwine Clare, says while many employed Jamaicans have remained in their jobs, many are tightening the funds they normally send to the island in an effort to control spending.

There are people who I know used to send remittances and they used to send like US$200, they are probably going to send $100 now, says Clare.

Antonio Edwards, a 25-year-old electrical engineer in New York, is facing some of those hardships. Since January he has had to reduce the frequency with which he sends money home, from every month to once every three months. He has four sisters and a father who benefit from what he sends back to Jamaica.

Im not making the money. There is no job really. Most of the small companies are closing down, he says. Likewise, he says, many employers are not hiring.

Big and small companies alike in the US have been sending home workers since the economy started showing signs of recession.

Motor vehicle giants General Motors slashed 1,600 jobs just last week due to a decline in demand. According to the Wall Street Journal, in September, employers cut 159,000 jobs.

projects on hold

Edwards, who works for a small company, says while he remains employed, his services are not being sought as frequently as it used to be, as people and businesses are trying to reduce spending or have put their projects on hold.

Probably Ill get a job for about three months after that I dont get another until the next two months, he says.

Prime Minister Bruce Golding has assured the country that, in spite of the slowdown, remittance inflows will remain robust.

But a level of uncertainty lingers in the retail and manufacturing sectors as to how consumers will spend this Christmas with less than expected income from relatives abroad. Jamaicans spend the bulk of remittances on consumer goods.

Finance and banking professor at the University of Technology, Dr Neville Swaby says while spending will be below projection, there shouldn't be much to worry about.

Jamaicans will traditionally support their families at Christmas so I am not expecting there will be a decline, he says.