Business

Growth speeds up, but...

Growth speeds up, but expected to slow again

Friday, May 16, 2014    

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THE Jamaican economy grew for the third consecutive quarter during the first three months of 2014.

At 1.6 per cent, GDP growth was slightly higher than in the previous quarter and well ahead of the 0.4 per cent recorded for the third quarter of 2013.

But the faster pace of growth is not expected to spill over into this quarter.

"We expect real GDP for the April-June 2014 quarter to grow within the range of 0.5 per cent to 1.5 per cent," said director general of the Planning Institute of Jamaica (PIOJ), Colin Bullock.

With good weather conditions and increased production from agro parks, the agricultural sector is expected to continue to improve in output, along with mining and quarrying, construction and hotels and restaurants, which stand to benefit from an increase in visitor arrivals for spring break relative to 2013.

"The key down-side risks identified are continued contractionary impact of the tight fiscal stance, potential adverse weather conditions with the start of the hurricane season, and lower commodity prices particularly for key exports such as metals and agricultural products," added Bullock.

The change in real GDP for the current fiscal year, which runs to next March, is projected to fall within the range of one per cent to two per cent, with upside potential associated with the implementation of several growth-inducing projects in tourism, energy and infrastructure.

The stronger performance in the first quarter of 2014 reflected continued growth in the goods-producing sector, which was bolstered by rapid expansion in agriculture output -- the sector grew by 18 per cent over year-earlier levels as a result of further recovery from Hurricane Sandy in late 2012 and drought conditions in early 2013.

Mining output climbed by eight per cent due to higher global demand for alumina -- Both Windalco's Ewarton plant and Jamalco's refinery increased production.

The construction sector grew by 0.5 per cent as the pace at which non-residential building construction (particularly hotel developments) increased offset the decline in road and water works.

Manufacture declined mainly due to lower production of three of the six petroleum products made locally.

Growth in the services sector slowed from the 0.7 per cent increase in real value added recorded for the last quarter of 2013 to 0.3 per cent in the review period.

Output from the wholesale and retail trade, repair and installation of machinery sector was slightly higher than in the previous quarter as domestic demand climbed, but all other services subsectors slowed down.

Unemployment levels also fell to 13.4 per cent or 175,100 individuals in January, down from the 187,500 jobless persons (14.4 per cent of the labour force) recorded a year prior.

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