CONSTRUCTION activities picked up further in the last quarter of 2023 with the sector expanding by 1.4 per cent in the quarter to mark a second-straight quarter of growth following a downturn.

This follows a 4.8 per cent decline recorded for the corresponding October-December period of 2022.

Data provided by the Planning Institute of Jamaica (PIOJ) this week saw the sector further building on growth, following a smaller increase of 0.7 per cent during the previous July-September quarter. Prior to that, the industry recorded contractions of 0.7 per cent and 4.2 per cent during the April-June and January-March quarters of 2023.

“The industry’s performance was reflected in an increased supply of cement and asphalt, as well as higher real sales from firms that operate within the construction industry,” PIOJ’s Director General Dr Wayne Henry said during a quarterly briefing on Wednesday at which time he presented the preliminary estimates.

“There was a real increase in construction-related sales of 1.7 per cent,” the data noted.

Higher production of cement, up 7 per cent during the quarter, the PIOJ said also helped to temper a decline in the ‘other manufacturing’ sub-industry which contributed to wholesale contractions of 0.3 per cent in the larger manufacturing industry.

The country’s main cement producer Caribbean Cement Company, whose sales during the first nine months of 2023 climbed to $21 billion, had said it has been focused on plans geared towards a build-out of its manufacturing capacity which it wants to expand by as much as 30 per cent by end of this year into early 2025. This increase is likely to further contribute to positive increases for the sector which was previously impacted by a scale down in building and other infrastructural projects across the island.

The growth of construction, supported by upticks in the mining and quarry and agriculture industries, which grew 23.6 per cent and 2.4 per cent, respectively, the PIOJ said resulted in a 2.3 per cent expansion of the goods producing industry during the reporting quarter. This, as the services industry increased 1.8 per cent following higher real value added across most of its sub-industries particularly hotels and restaurants, which went up 5.2 per cent as stopover arrivals continue to increase.

Despite a marginal calendar year decline of 0.8 per cent for the construction sector, growth across manufacturing and mining led to growth of approximately 2 per cent for the goods producing industry. This coupled with growth of some 2.9 per cent for the services industry resulted in a 2.6 per cent increase for the local economy during the 12 months of 2023.

“Growth for the year was led by hotels & restaurants, up 11.9 per cent; and mining & quarrying, up 87.6 per cent,” the PIOJ outlined in its estimates.

Henry, in maintaining a generally positive outlook for the local economy over the short-medium term, said the projection is for growth at the end of the current January-March quarter to be within the range of 1.5-2.5 per cent. Similar growth, he said, is also expected for the fiscal year 2023/24 (April 2023-March 2024).

Pegging the realisation of its projections to higher levels of productivity, an underperformance in this area, which has plagued Jamaica for the last 40 years, the PIOJ in its report said must be remedied if the country is to increase output or capitalise on the new growth phase it currently enjoys in the post-COVID era. Some of the areas which must be addressed in order to close the productivity gap between Jamaica and some global comparators, the entity said should facilitate greater efforts in research, development and innovation, the adoption of digital skills, pay and productivity alignment, infrastructural development around road, sea and air connectivity as well as active labour market policies.

“The PIOJ will continue to consult and work with our partners in relevant ministries, departments and agencies (MDAs) to determine the most appropriate mix of strategies to pursue higher levels of productivity,” Henry stated.

The PIOJ, following the launch of its new economic tool, the Inclusive Growth Index Framework (IGIF), is looking to, in subsequent measurements of the economy offer a more detailed assessment of economic performance. The IGIF, which aims to provide a deeper understanding of the country’s overall state (integrating more social indicators), is outside of the traditional single-variable GDP measurement that has been used for decades, laying the basis for the organisation to offer a more solid, quantifiable foundation for policy responses and initiatives that seek to address the diverse needs of the population.