McPherse Thompson, Assistant Editor - Business
The Jamaican economy recorded growth of 1.5 per cent during the past year - the first annual expansion in real GDP recorded since 2007 - driven largely by a boost in demand for bauxite and alumina as well as better weather conditions which drove improved performance in the agricultural sector.
For the fourth quarter, October to December 2011, the economy is estimated to have expanded by 1.7 per cent compared with the corresponding period in 2010, the Planning Institute of Jamaica (PIOJ) reported Thursday.
During the three-month period, the goods-producing sector grew by 5.8 per cent, while the services industry expanded by 0.2 per cent, PIOJ Director General Dr Gladstone Hutchinson said, while reviewing the economy's performance at the institute's New Kingston offices.
All industries recorded growth in the goods-producing sector during the review period, with agriculture, forestry and fishing evidencing the strongest increase of 16.4 per cent.
The growth in agriculture reflected a 28.9 per cent improvement in 'other agricultural crops', as well as recovery relative to the corresponding period in 2010 when performance was negatively affected by the impact of Tropical Storm Nicole in September that year, in addition to the global recession.
Mining and quarrying was up 8.2 per cent, driven by higher production of alumina and crude bauxite of 6.4 per cent and 18 per cent respectively, "largely reflecting the continued impact of the reopening of the Windalco Ewarton Alumina Plant (in St Catherine) and increased bauxite production by Noranda Bauxite Company in St Ann," Dr Hutchinson said.
Real value-added in the manufacturing industry grew by 2.1 per cent due to increases in food, beverages and tobacco, up 1.8 per cent, and 'other manufacture', which increased by 2.5 per cent.
The rise in 'other manufacture' was influenced mainly by a boost in petroleum and chemical production. "The increased petroleum production should be viewed against lower production in the corresponding period of 2010, as the refinery was not fully operational for the entire quarter," the PIOJ director general said.
Dr Hutchinson said construction grew one per cent during the quarter, attributable mainly to road projects being executed under the Jamaica Development Infrastructure Programme, in addition to the Palisadoes roadway and the Sandy Bay to May Pen phase of Highway 2000.
Also contributing to growth in the construction sector was expansion in residential construction activity, influenced primarily by a 152.7 per cent increase in housing starts.
Transport gears down
Hutchinson reported that all industries within the services sector, except finance and insurance which decreased by 0.5 per cent, and transport, storage and communication, down 2.4 per cent, recorded growth.
The decline in the transport and storage component reflected the impact of the final transfer of Air Jamaica assets to Caribbean Airlines in July 2011.
Within the services sector, the largest increase was electricity and water supply, up 3.4 per cent.
For calendar year 2011, the sectors contributing most to the overall 1.5 per cent growth were mining and quarrying, up 20.2 per cent, and agriculture, forestry and fishing, up 11 per cent.
For the month of January 2012, bauxite production declined by 1.1 per cent, reflecting the combined effect of a 9.4 per cent decrease in aluminium production and a 3.7 per cent growth in crude bauxite production.
During the same period, electricity generation and sales decreased by 1.2 per cent and 5.9 per cent, respectively, Dr Hutchinson said. The decline in electricity sales to residential customers reflected increased efforts at conservation by those consumers, he added.
For January, airport arrivals decreased by three per cent, but cruise passenger arrivals increased by 74.1 per cent, he said.
The PIOJ is projecting growth in the range of 0.5 to 1.5 per cent for the period January to March.