The quarterly central bank report on monetary policy published by the Bank of Jamaica shows a 0.5 per cent improvement in labour productivity.

Labour productivity measured as real gross domestic product (GDP) per worker improved marginally (0.5 per cent) during the three months to June 30 against the matching period in 2005.

But, fallout in the construction sector from the cement shortage and industrial disputes in the mining sector squeezed output per worker for these sectors in the review period.

According to the Bank of Jamaica's (BoJ) quarterly monetary report for the September 2006 quarter, the improvement was reflected in agriculture, electricity and water and transport, storage and communication.

"The improvement in agriculture was attributed to favourable weather conditions during the first half of the year, which enhanced the performance of the sector," said the report.

Indeed, GDP data and labour statistics provided by the Statistical Institute of Jamaica (Statin) show that the agricultural sector in the June quarter of this year showed a 17 per cent increase in output over the comparative period last year, but only had 1.2 per cent growth in employment.

Electricity output grew by two per cent against an 11 per cent decline in the number of workers, as the sector shaved just under 700 jobs over the 12 months to June this year.

GDP for transport, communication and storage outpaced the growth in employment for the sector, as 1,000 jobs created over the year represented a smaller increase than the 4.6 growth in real output.

But when Carreras moved its cigarette manufacturing operations to Trinidad late last year, it meant that output for the manufacturer sector would have fallen off dramatically, four per cent for the June quarter this year relative to the corresponding period last year, which placed against an 11 per cent increase in the number of workers or the addition of nearly 8,000 workers over the year, the sectoral productivity plummeted.

"Mining, manufacturing, and construction, however, registered declining labour productivity during the period," added BoJ's report.

Similarly, the fallout in the construction sector due to the "shortage of cement on the domestic market would have affected activities

within the construction industry."

Industrial disputes within the mining sector, according to the BoJ, affected productivity. Mining output grew by 1.5 per cent during the quarter, but more than 800 jobs was added to the expanding sector, representing a 16 per cent increase in the number of workers employed.

The measure used for labour productivity is considered a crude representation, according to Dr. Charles Douglas executive director of the Jamaica Productivity Centre, but it also represents the springboard from which his organisation will attempt to measure all input factors.

"It is a crude measurement. What is more relevant is the number of hours worked," posited Douglas. "As you have better quality information you move towards output per hour worked, which also takes into technology into account implicitly."

"For instance, if a farmer is using a machete to harvest crop the output per hour worked would pale in comparison to one who is using harvesting machinery," he added.

Ultimately, the JPC would like to measure 'total factor productivity', as it is called, which takes into account all input factors, such as capital, human capital technology (explicitly) and labour."

-camilo.thame@gleanerjm.com

GDP and employed labour force: corresponding quarter change for three months to June 2006, both in percentages:

Sector GDP Workers

Agriculture 17.0 1.2

Mining 1.5 16.4

Manufacturing -4.3 11.1

Construction -4.4 6.6

Distribution 0.8 5.3

Electricity 2.0 -11.1

Transportation 4.6 1.2

Financial 2.2 0.0