Sun | Sep 24, 2017

Jamaican economy grows 0.9% in first quarter

Published:Wednesday | June 1, 2016 | 6:56 PMMcPherse Thompson

The Jamaican economy grew by an estimated 0.9 per cent for the quarter to March 2016 when compared with the corresponding period last year and was the same level of expansion for fiscal year 2015/16, the Planning Institute of Jamaica reported on Wednesday.

The positive outturn for the quarter largely reflected the impact of the improved global economic environment on major service industries such as hotels and restaurants, said PIOJ Director General Colin Bullock.

It also mirrored “an improvement in domestic demand resulting from the strengthening of both business and consumer confidence levels, and increased industrial production which resulted in improved out-turn for industries such as manufacture and electricity and water supply,” he added.

The goods-producing industry grew by 1.0 per cent with the agriculture, forestry and fishing, manufacture and construction industries registering improvements in real value added during the review period.

That performance largely reflected the impact of increased demand and improved weather conditions, said Bullock, in reviewing the economic performance at the PIOJ’s offices in New Kingston.

For fiscal year 2015/16, all industries except for producers of government services were projected to have grown.

The industries with the largest increases during that period were manufacture, 3.9 per cent; electricity and water supply, 3.4 per cent; hotels and restaurants, 1.6 per cent, and other services, 0.8 per cent.

During the review quarter, the agriculture, forestry and fishing industry grew by an estimated 2.0 per cent due to increased output recorded for other agricultural crops which was up 1.9 per cent as a result of a 20.5 increase for fruits; condiments, up 12.4 per cent, and potatoes, up 3.5 per cent.

There was also an 18.5 per cent increase in animal farming, largely due to a 25.7 per cent increase in broiler meat production, and post harvest activities, up 138.6 per cent, primarily associated with a 154.9 per cent increase in coffee production.

However, output in traditional export crops declined by 12.9 per cent because of a 36.9 per cent downturn in sugarcane, a 2.8 per cent decrease in banana production, and a 15.3 per cent decline in cocoa production.

Bullock said the decline in sugarcane production was attributed to the lack of production at Appleton and Everglades which remained closed, as well as to illicit cane fires. The lower banana and cocoa production was due to drought which prevailed in previous quarters.

The mining and quarrying industry contracted by 1.0 per cent, reflecting weak external demand from the major overseas customers.

Total bauxite production contracted by 5.3 per cent, while crude bauxite production contracted by 12.1 per cent largely the result of financial challenges facing major United States refineries which buy Jamaican bauxite. 

The manufacture industry grew by 1.1 per cent, while construction grew 0.4 per cent, reflecting increased activity in the building construction component.

The other construction component contracted due to lower capital expenditure on infrastructure projects by telecommunication firms, the National Water Commission and the Jamaica Public Service Company.

However, increased expenditure was recorded by the National Works Agency which disbursed $2.4 billion compared with $639.5 million in the corresponding quarter of 2015.

The transport, storage and communication industry grew by 0.4 per cent due to improvement in the communication component, resulting from increased use of data services and product innovation.

However, the transport and storage component contracted, reflecting a downturn in activities at the island’s sea ports, largely because of lower petroleum imports and lower bauxite exports.

The finance and insurance services industry grew by 0.6 per cent during the quarter, reflecting increases in the net interest income on the stock of loans and advances, fees and commission income and capital gains associated with trading on the stock market.

Non-performing loans as a share of total loans at commercial banks fell by 0.9 percentage point to 4.0 per cent.

The wholesale and retail trade, repair and installation of machinery industry grew by 0.5 per cent due to higher levels of domestic demand.

mcpherse.thompson@gleanerjm.com