Thu | Feb 20, 2020

Mining biggest contributor to growth in December quarter

Published:Friday | February 22, 2019 | 12:24 AM
Dr Wayne Henry, director general, Planning Institute of Jamaica. File

The mining and quarrying industry contributed the lion’s share of the 1.7 per cent expansion in the Jamaican economy during the quarter ending December 2018, growing by nearly 23 per cent as a result of increased capacity utilisation at two of the country’s three alumina refineries.

The capacity utilisation rate measures the proportion of potential economic output that is actually realised. Displayed as a percentage, capacity utilisation levels give insight into the overall slack that is in the economy or a firm at a given point in time.

The mining and quarrying industry also contributed the most to the 1.8 per cent growth in GDP in calendar year 2018. It’s 32.5 per cent expansion was augmented mainly by the reopening of Alpart in St Elizabeth, Jamaica’s largest alumina plant.

During the October to December 2018 quarter, alumina production grew by 30.8 per cent, driven by increased capacity utilisation at the Alpart and Jamalco refineries, Dr Wayne Henry, director general of the Planning Institute of Jamaica, PIOJ, in his quarterly review of Jamaica’s economic performance at the PIOJ’s office in New Kingston on Wednesday.

Further growth in alumina was stymied by production downtime at the Alpart refinery due to technical issues, he said. Crude bauxite production decreased by 19.4 per cent, largely reflecting a fall in demand by third-party customers.

Other significant contributors to GDP in the review quarter were construction, which grew by 3.5 per cent, driven by civil engineering and building construction activities.

The other construction component is estimated to have increased due to higher expenditure by the National Works Agency, which disbursed $7 billion, up 112.7 per cent; the Port Authority of Jamaica, which disbursed $3.7 billion, up 92 per cent; and the Jamaica Public Service Company, which disbursed $6.1 billion, up six per cent.

That outweighed the impact of lower disbursement by the National Water Commission which, at $395.5 million, was down 63.2 per cent compared with the similar quarter of 2017.

Agriculture, forestry and fishing increased by 2.6 per cent, mainly as a result of favourable weather and increased productivity, while hotels and restaurants increased by 2.5 per cent, augmented by higher tourism arrivals.

Other key drivers of growth during the quarter were increased external demand from Jamaica’s main trading partners, which supported increased exports of some goods and services, increased hotel room and air seat capacity, which facilitated growth in stopover visitor arrivals, as well as an intensification of road construction and rehabilitation, Dr. Henry said.

During the October to December quarter, the goods-producing industry grew by 4.2 per cent, while the services industry was up 0.8 per cent compared with the corresponding quarter in 2017.

The other top sectors were transport, storage and communication, up 1.6 per cent; the manufacturing industry, which expanded by 1 per cent; followed closed by finance and insurance services, up 0.9 per cent.

Electricity consumption increased by 0.1 per cent due to higher sales recorded among the residential, general service, power service and large power users.

The PIOJ is projecting growth for the quarter ending March 2019 within a range of 1.5 per cent to 2.5 per cent, and 1.5 per cent to 2 per cent for the full fiscal year.