Were it not for ongoing construction projects from last year continuing into 2008, the goods-producing sector would not have had any positive results during the three months to June 30, according to the Planning Institute of Jamaica (PIOJ).

What's more, optimistic projections for the September quarter barely places the economy above a recession, avoiding a consecutive second quarter of decline by less than one per cent.

Yesterday, PIOJ director general Dr Wesley Hughes announced an overall decline in the economy by 0.2 per cent, during the period April to June 2008, relatively flat compared to the corresponding period last year.

The services sector, which accounts for 72 per cent of the economy, "demonstrated positive growth of 0.2 per cent" stemming from marginal growth in the real estate and business services, hotels, restaurants and clubs, finance and insurance services and the distributive trade.

But declines in output in Agriculture, Mining and the Manufacturing sectors contributed to an overall decline of 0.9 per cent in the goods producing sector, yielding an overall economic decline during the quarter.

The announcement was made yesterday at PIOJ's quarterly press briefing held at its headquarters in New Kingston.

According to Hughes all sectors within the goods-producing sector registered declines with the exception of construction and installation, which recorded an increase of three per cent.

Increased activities in non-residential construction such as Highway 2000, work on the Norman Manley and Sangster International Airports and on hotels, explained Hughes, continued to drive the steady growth in the subsector.

But the performance of the agricultural sector was weak, registering a decline of 6.8 per cent with a fall-off in domestic crop production of 10.8 per cent.

By PIOJ's estimate, seven of nine crop groups recorded declines including: legumes, down 42.2 per cent; plantains, down 35.3 per cent; yams and potatoes down 16.4 per cent and 19.6 per cent, respectively.

Export crop production was also negatively impacted (down 23.7 per cent) resulting from a 6.9 per cent decrease in the production of sugar cane and hardly any production of bananas during the period.

Livestock production was also down by 0.6 per cent.

Mining and quarrying continued its decline from early 2007, registering a drop of 1.5 per cent on the output the comparative period the year before. This was due to a 2.2 per cent decline in alumina output attributable to a reduction in the capacity utilisation rate from 94.1 per cent to 92.0 per cent, partly due to challenges associated with Hurricane Dean.

Crude bauxite production, however, increased by 5.9 per cent.
Poor performance in the Manufacturing sector (down 0.8 per cent), said Hughes, was due primarily to decreases in the production of Food, Beverages & Tobacco (down one per cent). Other Manufacturing also registered a decline of 0.6 per cent with automotive diesel oil down 27.9 per cent, Fuel oil down 5.8 per cent, LPG down 14.9 per cent as well as decreases in the chemical supply of sulphuric acid, aluminium sulphate and sulphonic acid, down 65.2 per cent, 42 per cent and 18.4 per cent, respectively. Cement production however, rose by 1.8 per cent.

The Services sector demonstrated positive growth of 0.2 per cent.
Increased loans and advances to the distributive trade sector, as well as increased remittance flows and an expansion in imports, contributed to the 0.8 per cent growth within the sector. The finance and insurance sector, which grew by an estimated 1.2 per cent, was favourably impacted by increases in fee and commission income associated with the higher volume of activities within the sector, as well as by an expansion in loan and investment portfolios for financial institutions.

In the Tourism sector, real GDP of hotels, restaurants and clubs continued to show improvement, with growth of 1.3 per cent. Total tourist arrivals fell by 7.1 per cent on lower cruise ship passenger arrivals - 17.8 per cent less than last year - while stopover arrivals grew by 3.7 per cent.

The PIOJ projected real growth of between 0.6 per cent and one per cent during the July to September quarter, a "somewhat optimistic" assessment according to the planning agency.

"Steady growth in the construction and installation sector should impact favourably on the goods producing sector, which is projected to increase within the range of one and 1.5 per cent and improvement in the output of electricity and water should result in further growth between 0.5 per cent and 0.8 per cent within the Services sector.

A glimpse of the output figures for July 2008, suggests continued decline for major earning sectors.

. Total electricity generation was down 2.4 per cent in July while sales declined by 1.6 per cent;

. Total bauxite production declined by 13.2 per cent due to a 16.8 per cent decline in alumina production and a 3.1 per cent decline in crude bauxite production; and

. Stopover arrivals increased by 1.9 per cent and cruise passenger arrivals were down by nine per cent.

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