Nov 2016 Financial News

Agriculture biggest driver of 2.2% growth in third quarter (Jamaica)

Nov 18, 2016

The agriculture, forestry and fishing industry, with a 28 per cent increase in output, was responsible for the lion's share of the 2.2 per cent estimated gross domestic product (GDP) expansion of the Jamaican economy for the quarter to September 2016.

Dr Wayne Henry, director general of the Planning Institute of Jamaica (PIOJ), said the pace of growth represented the strongest estimate since April-June 2007.

"Overall, the projected out-turn largely reflects the positive impact of higher levels of business and consumer confidence and increased employment levels with supported increased demand," said Henry at the PIOJ's quarterly press briefing on the real economy.

He also attributed it to the improved performance in the economies of Jamaica's main trading partners, and improved weather condi-tions relative to the corresponding quarter of 2015 which facili-tated higher levels of output. This was also reflected in increased construction activities with the building of new, and refurbishment of existing hotel rooms, the build out of office space to facilitate the expansion of the business process outsourcing industry, and road rehabilitation and expansion works.

Henry said, however, that despite the overall positive out-turn, the growth performance was constrained by production downtime associated with maintenance activities in the manufacture industry and delays in the implementation of several government-financed capital projects.

Total capital expenditure was 24.9 per cent less than budgeted during the review period and 26.4 per cent less than budgeted for the fiscal year to September, he said.

The goods-producing and services industries are estimated to have grown by 6.7 per cent and 0.8 per cent, respectively.

Growth in the agriculture, forestry and fishing industry was largely attributed to expansion of other agricultural or domestic crops, which increased by 41.9 per cent; traditional export crops, which was up 22.7 per cent; and post-harvest activities, which grew 26.9 per cent.

Dr Henry said mining and quarrying grew by two per cent, a reflection of higher production of alumina, which grew by 9.9 per cent due to higher output from Jamalco in Clarendon and Windalco in Ewarton, St Catherine.

He said a decrease in crude bauxite production of 37.8 per cent was due largely to a contraction in demand by overseas refineries.

Manufacture remained flat, while the construction industry grew by 1.2 per cent due to increased activities in both the residential and non-residential categories.

The electricity and water supply component grew by an estimated 2.9 per cent due to an increase in electricity consumption and higher water production associated primarily to increased rainfall during the quarter.

The transport, storage and communications industry expanded by an estimated 0.8 per cent partly due to increased activities at the island's air and seaports, reflected in a 3.5 per cent increase in total passenger movements and a 6.5 per cent increase in air cargo movements.

The wholesale and retail trade, repair and installation of machinery sector rose by an estimated 0.6 per cent due to higher gross sales, which reflected increased volume and value of ABM and point-of-sale transactions, improved performance in the construction as well the agriculture, forestry and fishing industries, and higher employment levels, Henry said.

The finance and insurance services sector expanded by 1.5 per cent, reflecting increases in net interest income, revenue from fees and commissions, and income on other financial assets at commercial banks and building societies.

The hotels and restaurant industry is estimated to have grown by 2.3 per cent, reflecting a 2.7 per cent increase in stopover arrivals comprising visitors from the United States, up 4.1 per cent; Canada, up 1.2 per cent; and the Caribbean, up 3.9 per cent. However, there was a four per cent decline in cruise passenger arrivals during the quarter.

The PIOJ said preliminary data revealed that airport arrivals for October 2016 declined by 1.5 per cent relative to the same period last year, while cruise passenger arrivals increased by 2.9 per cent.

For the December quarter, PIOJ is projecting growth of one to two per cent.

 

Source:
McPherse Thompson
mcpherse.thompson@gleanerjm.com
Jamaica Gleaner
Friday November 18, 2016

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