Camilo Thame, Business Reporter

Tourists raft down the Rio Grande in Portland. Jamaica had over three million visitors in 2006. The sector also saw a boost in spend as a result of the increased business. - File

The Statistical Institute of Jamaica (Statin) mea-sured 2.9 per cent real growth in the Jamaican economy during the three months to September 30 compared to the corresponding period in 2005.

The services sector, which represents about two-thirds of gross domestic product, grew by 4.3 per cent during the quarter, while real output in the goods producing sector moved upward by 0.5 per cent.

Statin's analysis of movement in the economy was slightly more favourable than estimates made two months ago by the state's planning agency, Planning Institute of Jamaica (PIOJ), which placed real growth during the September 2006 quarter at 2.7 per cent - 0.2 percentage points or about US$20 million (J$1.3 billion) lower than actual growth.

Real growth

The higher than projected out-turn reflected better growth figures for all sub-sectors of the services sector, and counter-balancing performances across the goods producing subsectors, which resulted in slightly higher than estimated growth by 0.1 percentage point

Real growth in the services sector was led by upward movement in earnings across 'hotels, restaurants and clubs' which, combined, registered earnings growth of 16.6 per cent, which translated in turn to a one per cent addition to total GDP.

This subcategory captures the majority of activities in the tourism industry, which recorded US$472 million (J$ billion) of spend from 665,598 visitors during the quarter, a 32.9 per cent increase in expenditure over the comparative period in 2005.

The upswing in the tourism sector was due in part to the increase in the number of festivities, including the return of Reggae Sunsplash in July 2006, and a less active hurricane season.

Real growth in the transport, storage and communication (TSC) sector was the second highest performing services subsector during the quarter.

The seven per cent growth for the sector represented almost a third of the overall economic growth during the quarter. According to PIOJ's Economic Update and Outlook report for the September 2006 quarter, the improvement for the TSC sbusector was mainly influenced by:

A 16 per cent rise in volume of cargo handled due in part to the increase in volume exports of sugar bauxite and alumina;

The 5.6 per cent growth in the total number of vessel visits; and

The 5.1 per cent increase in total passenger movements at the islands international airports.

Growth in distributive trade - the single largest industry in Jamaica generating just over 20 per cent of total output - was third highest at 1.7 per cent, which translated to 12 per cent of overall economic growth during the review period.

For the goods producing sector, which grew by 0.5 per cent over the comparative quarter in 2005, agriculture led at 10.5 per cent, driven by a 150 per cent increase in traditional export crop - coffee, banana and cocoa - production, while mining and quarrying grew marginally by 0.8 per cent, resulting from an increase in crude bauxite production (16.1 per cent) against a one per cent decline in alumina production as a result of equipment failure at two refineries.

Manufacturing continued to see decline - down 2.6 per cent during the quarter - largely as a result of Cigarette Company of Jamaica moving its manufacturing operation to Trinidad. Some 157 million cigarette sticks were produced during the July to September quarter of 2005 compared to none during the quarter under review.

The construction sector continued to feel the sting of the cement crisis from the first half of the year, declining by two per cent.

The PIOJ projects that the economy will grow by 3.2 per cent during the three months to December 31 which, coupled with Statin's measurements for the March, June and September quarters - 1.8 per cent, 2.4 per cent and 2.9 per cent growth respectively - places the projection for overall growth for calendar year 2006 at 2.6 per cent.

In its projection for the December quarter, the PIOJ estimates that the goods producing sector will see 3.9 per cent real growth reflecting recovery from the comparative quarter the year before which experienced a slowdown as a result of the brewing cement crisis and squeeze on agricultural sector from heavy rains in October.

The planning agency also expects a 2.7 per cent increase in real output from the services sector.

camilo.thame@gleanerjm.com