May 2017 Financial News

Growth flatlines for first quarter. Improvements in manufacture and finance outweighed by downturn in agriculture and mining

May 31, 2017

As the Economic Growth Council works towards five per cent growth in three years and the nation works towards first-world status by 2030, the task just got a little harder. Latest information out of the Planning Institute of Jamaica states that the growth rate remained flat for the first quarter of 2017 over the comparative quarter of 2016, led by declines in agriculture, mining and quarrying, according to newly released data from the Planning Institute of Jamaica (PIOJ).

The flat growth compares to growth of 0.9 per cent for the first quarter of 2016, and to growth of 1.3 per cent for the last quarter from October to December last year.

Although the country experienced growth for the first quarter of 2017 in the manufacture and finance industries — up 1.1 per cent and 0.5 per cent respectively —that growth was outweighed by decreases registered for the mining and quarrying industry, down 10.8 per cent; and the agriculture, forestry and fishing industry, down 2.5 per cent.

“The decline in agriculture, forestry and fishing was due to lower output recorded for the heavier weighted component, other agriculture crop down five per cent, reflecting lower production in five of the nine groups. Among those declining were fruits, down 16.3 per cent, condiments down 14.5 per cent and potatoes down 18.2 per cent,” director general of the PIOJ Wayne Henry said during its quarterly press briefing yesterday.

In contrast, output in the category traditional export crop was estimated to have increased by nine per cent. According to Henry, this was due to sugar cane, up 20.5 per cent, and bananas, up 18.1 per cent. However, coffee and cocoa production declined by 65.4 per cent and 23 per cent respectively reflecting the impact of the resurgence of the coffee leaf rust disease and adverse weather.

Real value added for the mining and quarrying industry declined by 10.8 per cent. Total bauxite production fell by 23.1 per cent due to lower production of crude bauxite (40 per cent) and alumina (6.1 per cent). The fall-off in crude bauxite production stemmed from loss of market share in the USA, while alumina production was affected by factory downtime and heavy rainfall.

The industries reflecting the largest increases were finance and insurance services, up one per cent; real estate, renting and business activities, up one per cent; and other services up 0.6 per cent. The electricity and water, transport, storage and communication; wholesale and retail trade, repair and installation of machinery industries each recorded an increase of 0.5 per cent.

Construction also climbed 0.8 per cent reflecting growth in building construction due to expansion of non-residential construction.

“This was evidenced by increased hotel construction and plant renovation activities in the mining and petroleum sub-industries as well as construction of other commercial structures. However, other construction component is estimated to have declined reflecting mainly lower capital expenditure on infrastructure project,” Henry said.

The country's hotels and restaurants industry increased by 0.3 per cent, reflecting increases in stopover arrivals by 0.1 per cent and cruise passenger arrivals by 3.2 per cent. Total visitor expenditure increased by 3.7 per cent to US$759.3 million.

The first quarter figures were not affected by the recent flood rains, nor the anticipated improvement in bauxite and alumina production coming out of Alpart.

The PIOJ is anticipating growth within the range of 0.5 per cent to 1.5 per cent for the April to June 2017 quarter, relative to April to June 2016.

Source:
BY KARENA BENNETT
bennettk@jamaicaobserver.com
Business reporter
Jamaica Observer
Wednesday May 31, 2017 

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