Employers on Tuesday acknowledged that rising operating costs are putting pressure on businesses across several sectors, but they have rejected suggestions that the recent closure of a handful of firms signals a broader crisis of confidence in the island’s economy.
Speaking during a press conference at the Barbados Employers’ Confederation (BEC) headquarters on Deighton Road, executive director Sheena Mayers-Granville said businesses across several sectors continued to grapple with rising expenses, including labour, energy and transport.
Recent closures include Bryden’s Pharmacies, Cavi and Vino, and Mojos Bar and Restaurant, with Berger Paints preparing to shut down its factory here shortly.
Mayers-Granville said the end of a business carried wider economic consequences beyond the organisation itself.
“Recent business closures have understandably generated significant public concern. The closure of a business extends far beyond the organisation itself. Workers lose jobs, families face uncertainty, and communities are affected,” she said.
“When a business closes, it is not just a company that disappears – it is jobs, livelihoods and economic activity.”
She stressed that no single factor typically led to a company shutting its doors, even as Barbados continued to operate in what she described as a relatively expensive environment for enterprise.
“In terms of business operations in Barbados, we are a high-cost jurisdiction. High cost generally, in terms of the cost of labour, the cost of energy, the cost of transportation,” she said.
“But we are also very clear that business closures don’t happen in a vacuum. There’s usually not one single element that will determine a business closure.
“Employers will review all of the possible options that they have, and it’s usually over a period of time before they make a decision to close. So it’s never, or it’s usually not, a single item that would force a business closure. A lot of consideration goes into that decision.”
Officials of the confederation said that while some employers have expressed concern about rising costs across the economy, the recently increased minimum wage has not been identified as the sole cause of the closures.
BEC president Gail-Ann King said the organisation had received no reports from its members linking business failures directly to the wage increase.
“No, we’re not saying that minimum wage, nor have our constituents stated that minimum wage forced closures,” King said.
“What we’ve stated is that the overall cost sometimes of doing business and the process of doing business is critical to business success.
“And those are some of the aspects that we are seeking for persons of policy to pay attention to, because that’s critical to business success. That’s critical for businesses to be able to thrive in this environment.”
King added that policy decisions affecting the cost and ease of doing business would become increasingly important as Barbados navigates uncertain global economic conditions, including rising oil prices and disruptions in global shipping linked to geopolitical tensions.
Mayers-Granville acknowledged that global developments had begun to add further uncertainty for local businesses, noting the recent spike in oil prices amid tensions in the Middle East.
“Employers are monitoring the situation. The reality is, yes, the price of oil has jumped drastically in the last week or two. But how long will that price jump last? None of us knows,” she said.
“At this point, it’s about monitoring the situation and trying to make key decisions as necessary.”
Barbados’ tradition of social dialogue between government, labour and the private sector would remain an important mechanism for managing external economic shocks, she said.
“What we do believe is social dialogue has carried us through some of the worst of times. And therefore, when we’re facing pressures that are not home-grown, we will have to go back to that tool that has served us well in the past and have dialogue to see how we can weather the storm.”
Despite the recent announcements, the BEC said it had not detected broader unease among businesses about operating in Barbados.
“I would say at this juncture, I have not received any indications that business is not happy operating in Barbados. I think we still remain an economy that persons want to do business in,” Mayers-Granville said.
“And, per our employers, our members, certainly our conversations are more around how we are continuing to do business rather than if we are closing business. So those are the types of conversations we’re having.”
She also cautioned against drawing sweeping conclusions from a small number of closures occurring within a short period.
“I’m not alarmed when I hear four businesses close. Because when we see a number of businesses, we have to be mindful of what is the actual number. The number is actually not a high number,” she said.
“I think it’s because maybe they happened all within a shortened time frame. However, we’ll see what plays out for the rest of the year.”
King also noted that many enterprises in Barbados remained small or micro-sized and locally owned, meaning the business landscape continued to evolve as companies entered and exited the market.
“The majority of businesses are small and micro enterprises. A number are locally grown, locally owned,” she said.
She added that the focus must remain on creating the conditions that allow businesses to grow and sustain employment.
Mayers-Granville said the sustainability of enterprises ultimately benefited workers as well as employers.
“Only a sustainable enterprise is going to offer continued employment. We cannot be calling for workers to be employed if we are not allowing business fertile ground within which to be sustainable and which to grow,” she said.
“A closed business is not going to employ anyone.”
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