Slow, but steady growth
The Jamaican economy grew by 0.4 per cent in the first quarter of 2015 compared to the first quarter of 2014. This growth in output has been attributed to 0.6 per cent growth in Jamaica’s provision of services, which was enough to offset the 0.4 per cent decline in the goods output.
At the same time, the unemployment rate fell from 13.6 to 13.2 per cent. Male unemployment marginally fell from 10.4 per cent to 10.3 per cent, while female unemployment fell from 17.4 to 16.5 per cent during this time.
Where was growth recorded?
According to the Statistical Institute of Jamaica, the increase in services mainly came from hotel and restaurant, which increased by four per cent; the unemployed labour force in this sector fell by 600 people. Other contributing sectors to growth were transport, storage and communication, which increased by 0.9 per cent; there seemed to be a large increase in employment in this sector as the unemployed labour force fell by 2,100 people. Real estate, renting and business activities grew by 0.4 per cent; the unemployed labour force in this sector is 300 people fewer than last year. Wholesale and retail trade including repairs and installation of machinery and equipment grew by 0.3 per cent; the unemployed labour force in this sector fell by more than 2,900 people comparing last year April to this year. The finance and insurance sector grew by 0.2 per cent while the unemployed labour force grew by 1,100 people. Finally, other services increased by 1.5 per cent.
Regarding output of goods; construction grew by 1.3 per cent and mining and quarrying grew by 0.6 per cent.
Where did Jamaica record negative growth?
Despite the 0.6 per cent growth in Jamaica’s provision of services, there were some service sectors that recorded a decline in output, the provision of electricity and water supply fell by 2.8 per cent, the unemployed labour force fell from 1,000 to 400 hundred people over the one year period in this sector. The provision of government services fell by 0.1 per cent; the unemployed labour force here fell from 320 in April last year to 2,900 this year.
The 0.4 per cent decline in the output of goods was as a result of several factors. Noticeably, output in the agriculture, forestry and fishing industry fell by 0.6 per cent in the first quarter of 2015 compared to the first quarter of 2014. The agricultural sector has been negatively affected by islandwide drought conditions and the unemployed labour force in this sector increased by 400 hundred people over the same time period. Manufacturing output declined by 0.2 per cent in the first quarter of 2015 compared to 2014 also negatively affected by the drought conditions and the unemployed labour force in this sector increased by 500 hundred people over the one year period.
What about trade?
STATIN’s recently released trade data show that Jamaica’s imports and exports have been falling simultaneously since the start of the year. More recent data show that imports fell from US$445.703 in March to US$432.449 in April; exports also fell from US$157.208 to US$131.823 over the same time period. The country needs export to increase, while imports fall.
What is the situation currently?
Drought conditions have been severely affecting economic activity and economic output over the last three years and nothing significant is being done to address the issue. As a matter of fact, the situation is getting worse each year which should not be the case. Infrastructural development including more sustainable energy sources, to enable us to provide cheaper electricity as well as cleaner and more consistent water supply will help the country tremendously.
The economy is showing signs of recovery in certain aspects; however the overall situation is far from where we would like it to be. The marginal progress is not enough, more can be done by both the public and private sector to provide the necessary infrastructure needed to accelerate Jamaica’s rate of growth and improve the overall standard of living of the people. National discussions on economic issues have become pervasive and more people are beginning to understand the importance of decent infrastructure, good clean water and cheap energy to economic activity and output.
- Dr André Haughton is a lecturer in the Department of Economics on the Mona campus of the University of the West Indies. Follow him on twitter @DrAndreHaughton; or email email@example.com.