Led by agriculture and its associated industries, the Jamaican economy contracted in the June quarter by 0.4 per cent, the Planning Institute of Jamaica reported Tuesday.
The finance and insurance services sector also recorded strong declines, reflecting a real decrease in net interest income associated with the National Debt Exchange in February.
June marks the fifth quarter of decline, but the contraction was at a slower pace than the 1.3 per cent decline estimated in the March quarter by Statin.
The planning institute sees better prospects ahead in the coming quarter.
PIOJ Director General Colin Bul-lock said the agency is forecasting growth of 0.5 per cent to 1.5 per cent in the September quarter based on expected higher levels of output and return to positive performance by most industries.
Bullock said the current quarter largely reflected the impact of adverse weather-related conditions and a sluggish global economy on Jamaica's major export industries.
Real value added for agriculture, forestry and fishing decreased by eight per cent, reflecting the continuation of drought conditions as well as a delay in the recovery of longer-gestation crops, especially plantains and bananas, from the effects of Hurricane Sandy last October.
Other agricultural or domestic crops decreased by 3.3 per cent, while post-harvest activities increased by 72.5 per cent. Within the traditional export crops, lower output was recorded for sugar cane, down 41 per cent, and bananas, down 57 per cent.
Bullock said that was partly offset by increased output for cocoa, up 15 per cent, and coffee, up 144 per cent.
Mining and quarrying increased by five per cent, reflecting higher alumina production, even as crude bauxite production fell by more than four per cent as global demand softened.
Alumina production grew by 8.6 per cent because of higher output levels at the Jamalco plant, leading to a marginal increase in capacity utilisation, the PIOJ said.
The manufacturing industry declined by 0.4 per cent - other manufacturing fell by one per cent, while the food, beverages and tobacco component was flat.
Within the food segment, increases for dairy products, poultry meat and flour were counterbalanced by declines recorded for sugar, molasses, condensed milk and edible oils.
Bullock said the fall-off in 'other manufacturing' was influenced mainly by lower output of chemical and chemical products, as well as rubber and plastic products.
Real value added in the construction industry grew by 1.5 per cent because of an increased number of housing starts, housing completions, and the volume and value of mortgages.
The other construction category declined mainly because of a reduction in civil engineering activity associated primarily with roadworks.
Overall, the goods sector shrank 1.6 per cent, while services GDP experienced its worse quarter in a year, having shrunk 0.3 per cent.
The PIOJ said all service sectors declined in the June quarter.
Tourism recorded growth in visitor arrivals, by about five per cent, but spend contracted in the quarter by 0.5 per cent to US$502 million, the agency reported.
The transport and communication sector shrank by 0.2 per cent. Maritime cargo volumes fell by more than six per cent
For the review period, there was a decline of 0.1 per cent in the electricity and water sector. the Jamaica Public Service Company's power generation declined by 12 per cent, even as non-JPS sources recorded growth of 22 per cent. Water production declined by one per cent because of drought.
Bullock said real GDP in the wholesale and retail sector rose by 0.4 per cent from higher sales reflected in increased ABM and point-of-sale transactions, as well as improved performance in construction and mining.
The PIOJ reported that inflation for the quarter was 1.1 per cent, the main contributors being food and non-alcoholic beverages, up 2.4 per cent, accounting for 84 per cent of the increase in prices during the review period.
The main drivers of inflation were weather-related shocks, depreciation of the Jamaican dollar, the impact of new taxes, and increased grain prices on the international market.
PIOJ's growth prediction for the third quarter is predicated on continued roll-out of "growth-inducing" capital projects as well as "some return of investor confidence" from passing the first IMF test. The final result of the first review will be known in late September.
Downside risks to the forecast include higher oil prices, which climbed to US$109 per barrel on Tuesday, and potential hurricane damage.