1.8 per cent growth is nothing to scoff at – Henry

BY KARENA BENNETT
Business reporter
bennettk@jamaicaobserver.com

Friday, August 17, 2018

Print this page Email A Friend!


An estimated growth of 1.8 per cent for the April to June 2018 quarter has been described by director general of the Planning Institute of Jamaica (PIOJ), Wayne Henry, as “nothing of scoff at” given the country's current economic climate.

Statistics presented by the PIOJ during its quarterly press briefing yesterday, showed that the year-over-year growth experienced for the period April to June is the highest Jamaica has seen over the last two years.

The growth, according to Henry, was attributable to improved weather, the resumption of operations at Alpart – Jamaica's largest alumina refinery – and higher levels of construction activity.

“It is not easy for economies that are in the middle of fiscal consolidation programmes to reduce debt as we have, and it is difficult in that context to generate growth. But the fact that we have been able is testament to a lot of what you are seeing in terms of ongoing reforms over the years,” Henry told journalists.

He reasoned that further growth in the economy was stymied by plant downtime which negatively impacted output in the manufacturing industry, as well as a decline in the average length of stay by foreign nationals which adversely impacted real value added in the hotels and restaurants industry.

The director general, in responding to public pronouncements that growth in the construction industry remained at just over 1.0 per cent despite strong sales of some construction inputs, noted that the country could have seen even greater growth for the quarter, if significant investments in the growing construction industry were translated to overall growth of the country.

“While this may be an important indicator of performance by the industry, a one-to-one relationship does not exist between sales of construction inputs and growth in the industry. In instances when these inputs are locally produced, the impact on overall growth is stronger,” he said.

Henry, however, noted that in instances where raw material inputs are largely imported, the majority of the growth is registered in the economies of external trading partners, limiting the potential for additional growth in the domestic economy.

“Therefore, the assessment of growth performance must take into consideration the potential offsetting impact of the high import content on the final output. For Jamaica, data has indicated that the import content for some construction projects are in excess of 90 per cent of the total project cost,” he continued, adding that impact on growth will be realised on completion of the projects.

For the April to June quarter, Jamaica's agriculture, forestry and fishing industry grew by an estimated 10 per cent, largely reflecting the impact of favourable weather during the review quarter.

The weather conditions resulted in an increase in other agricultural crops (up 17.0 per cent); traditional export crops (up 12.7 per cent); and animal farming (up 3.7 per cent).

The increase in output for other agricultural crops reflected higher production in seven of the nine crop groups led by: condiments, up 40.1 per cent; fruits, up 27.6 per cent; and vegetables, up 21.2 per cent.

The expansion in animal farming was driven by broiler meat production, up 3.8 per cent and egg production, up 14.5 per cent.

Growth in traditional export crops mainly reflected a 44.2 per cent increase in the production of sugar cane, and banana, up 0.6 per cent.

These increases outweighed the impact of declines recorded for both coffee production (down 16.3 per cent) and cocoa production (down 45.8 per cent). Coffee production was negatively impacted by the coffee leaf rust disease, while cocoa production was stymied due to the outbreak of the frosty pod cocoa disease.

Jamaica's mining and quarrying industry grew by an estimated 30 per cent, due to increased output in both alumina and crude bauxite production. According to data presented by the PIOJ, the country's alumina production increased by 36.3 per cent to 581.3 kilo tonnes, resulting in an increase in the average capacity utilisation rate at alumina refineries, by 16.6 percentage points to 62.5 per cent.

The country's construction industry grew by an estimated 1.2 per cent attributable to growth in both the other construction and building construction components. Growth in building construction was reflective of increased levels of both residential and non-residential construction.

The PIOJ anticipates that growth for the July to September 2018 will be in the range of 1.5 per cent to 2.5 per cent. Furthermore, expectations are that growth for the year 2018 will climb above two per cent.

Specifically, growth in the short term is expected to be driven by mining and quarrying, and construction – reflecting the anticipated increase in housing starts; continued hotel construction and expansion; as well as an uptick in road construction and expansion works and the hotels and restaurants industry.

ADVERTISEMENT




POST A COMMENT

HOUSE RULES

1. We welcome reader comments on the top stories of the day. Some comments may be republished on the website or in the newspaper � email addresses will not be published.

2. Please understand that comments are moderated and it is not always possible to publish all that have been submitted. We will, however, try to publish comments that are representative of all received.

3. We ask that comments are civil and free of libellous or hateful material. Also please stick to the topic under discussion.

4. Please do not write in block capitals since this makes your comment hard to read.

5. Please don't use the comments to advertise. However, our advertising department can be more than accommodating if emailed: advertising@jamaicaobserver.com.

6. If readers wish to report offensive comments, suggest a correction or share a story then please email: community@jamaicaobserver.com.

7. Lastly, read our Terms and Conditions and Privacy Policy



comments powered by Disqus
ADVERTISEMENT

Poll

ADVERTISEMENT
ADVERTISEMENT

Today's Cartoon

Click image to view full size editorial cartoon
ADVERTISEMENT