Nov 2015 Financial News

Jamaica records strongest growth since June 2014 quarter

Nov 23, 2015

The Planning Institute of Jamaica (PIOJ) said the economy expanded by 1.5 per cent during the July to September quarter, the strongest growth recorded since last year's June quarter.

PIOJ Director General Colin Bullock said the increased growth was largely due to a recovery in manufacturing.

The figure surpasses the 0.4 per cent real GDP growth experienced in the March 2015 quarter, and 0.6 per cent in the second quarter to June. The performance was partly attributed to operations at the Petrojam refinery, which was closed for an extended period during the quarter to September last year, but was operational during the quarter under review, Bullock said.

The out-turn for the quarter "largely reflected the positive impact of implementation of strategic investment projects involving road repair works and highway construction that is phase one and three of the north-south link of Highway 2000, hotel construction and expansion, with an estimated 2,500 rooms under construction, and the construction of new office space to facilitate the expansion of business processing outsourcing activities," the PIOJ reported.

"It is also attributable to construction activities to establish three renewable energy plants as well as increased production by agro parks, which facilitated the stabilisation of agricultural output amidst severe drought conditions," said Bullock at the PIOJ's quarterly briefing on the economy on Thursday.

Growth was constrained by drought, which negatively affected water production and slowed the growth out-turn in other industries, he said.

Bullock said there was production downtime associated with technical problems at a major alumina refinery and "we had delays in the implementation of several government-financed capital projects where total capital expenditure was 13.8 per cent less than the corresponding quarter of 2014 and 52.8 per cent less than budgeted for the review period".

The goods producing industry grew by 4.4 per cent, with all industries except mining and quarrying registering increased value added during the quarter, largely reflecting 9.7 per cent growth in manufacturing.

For agriculture, forestry and fishing real GDP increased by an estimated 3.3 per cent, largely reflecting the relatively low levels of output recorded in the corresponding quarter of 2014. Traditional export crops increased by 5.6 per cent, due to a 15.2 per cent increase in bananas, and animal farming up by 8.4 per cent, largely reflecting an 8.8 per cent increase in poultry production and a 39.7 per cent increase in egg production.

The drought notwithstanding, growth in Agriculture GDP was attributed to increased output from the nine established agro parks which benefited from irrigation facilities. Total output from the agro parks was 611,517 kilogrammes, an increase of 73.5 per cent. There was improved rainfall during the quarter which facilitated increased production.

Real value added for the mining and quarrying industry declined by one per cent, reflecting lower production of alumina.

The construction industry grew by 0.8 per cent; the electricity and water industry by 3.5 per cent; transport, storage and communication by 1.5 per cent; finance and insurance services by 0.4 per cent, and the wholesale and retail trade, repair and installation of machinery by 0.3 per cent.

The hotels and restaurant sector grew by 1.2 per cent, reflecting a one per cent growth in stopover arrivals attributable to more visitors mainly from Europe, the rest of the Caribbean and the United States. There was also a 7.1 per cent increase in cruise passenger arrivals which resulted in an increase of 3.1 per cent in total visitor arrivals.

The PIOJ is projecting real GDP growth of 0.5 per cent to 1.5 per cent for the October to December quarter.

This story was first published online.

Source:
McPherse Thompson
mcpherse.thompson@gleanerjm.com
Jamaica Gleaner
R03;Sunday November 22, 2015

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