As the local economy continues its growth momentum, now above that of pre-pandemic levels, the Planning Institute of Jamaica (PIOJ) in its latest preliminary estimates has reported real value-added for gross domestic product (GDP) of approximately 2.7 per cent for the first quarter of 2023.
Director general of the PIOJ Dr Wayne Henry during a briefing held virtually Tuesday said the latest out-turn for the reported January to March period reflects some eight consecutive quarters of growth following fallouts incurred from the novel coronavirus pandemic.
"The out-turn for Jan-Mar 2023 largely reflected the impact of increased external demand especially for Jamaica's tourism product coupled with the positive performances in the transport, hotels and restaurants and other services industry. There was also increased domestic demand associated with the strength of the recovery particularly in the hotels and restaurants, transport, storage and communications industries along with the resumption of operations at the Jamalco alumina plant during the July-Sept 2022 quarter following its closure in August 2021," he said.
Growth, which he said was also tempered by a lacklustre performance across the goods producing industry which fell 0.7 per cent, also witnessed contractions in its agriculture and construction segments, down 7.6 per cent and 4 per cent, respectively, barely supported by manufacturing which meagrely grew at 0.7 per cent. The industry was, however, anchored by stronger out-turns in the mining and quarry industry which expanded by almost 96 per cent after stronger alumina yields (up 197.1 per cent) owing to the reopening of the Jamalco plant, which resumed operations after a fire in 2021.
The services industry, which, on the other hand, continues to be driven by robust growth in mainly its hotels and restaurants segment, went up 3.8 per cent. Growth within the dominant hotel and restaurants industry was 30.8 per cent stemming from increased stopover and cruise passenger arrivals to the island when compared to the corresponding period of 2022. Total visitor expenditure for the period also more than doubled to total US$761.6 million when compared to US$276.0 million in the corresponding period of the prior year.
For fiscal year 2022/23 real value added is also estimated to have grown by 4.3 per cent supported by improved performances in all industries, except mining and quarrying which contracted by an estimated 2.3 per cent, due mainly to the closure of the Jamalco alumina plant for seven months within the fiscal year along with construction, which declined by 4.2 per cent due a reduction in civil engineering activities resulting from the winding down of major road infrastructure projects.
For the year, the heavier weighted services industry was, however, estimated to have grown some 5 per cent while the goods producing industry moved up 1.8 per cent.
"The industries which recorded the strongest growth during the fiscal year were hotels and restaurants (up 34.9 per cent); other services (up 10.4 per cent); transport, storage & communication (up 5.4 per cent); manufacturing (up 5.3 per cent) and agriculture (up 4.8 per cent)," PIOJ data outlined.
The planning agency in a more long-term projection, however, said that its expectation is for the current FY2023/24 to experience growth within the range of 1-3 per cent, premised on a forecast that all industries will record growth, albeit at slower rates. Growth it envisions given strong performances continue to come from mining, tourism, other services and transport activities.
The director general, in a short-term outlook, also shared a forecast for the current April-June quarter for which growth has been projected within the range of 2-3 per cent and tied to the continuation of the growth momentum across most industries.
"Growth during this period is expected to be driven by the continued strengthening of the mining amd quarrying industry due to the resumption of full operations at the Jamalco alumina plant, increased domestic demand due an estimated expansion in employment levels, continued recovery in the global economy, despite the geopolitical challenges, which augurs well for a strengthening of external demand for Jamaica's goods and services, particularly, tourism," Henry said.
Pointing to data which supports these projections, he cited preliminary airport arrivals for April 2023 which totalled 238,530 persons â€” up 10.5 per cent when compared with April 2022; alumina production already up 359.3 per cent and crude bauxite production up 16.8 per cent. Electricity consumption up to April 2023 also reflected increases of 6.1 per cent and water consumption 1.6 per cent relative to April 2022.
Henry said that as the economy having now surpassed pre-pandemic levels, a year earlier than previously projected, a key development challenge now faced by the country is how it will be going forward, begin to capitalise on the growth momentum in order to realise sustainable economic growth rates above its one per cent long-term trend.
He said that while efforts are being made to attract significant investment to spur economic activities in key areas such as business process outsourcing, tourism, logistics, digital animation and other IT-related services, having an adequate supply of sufficiently skilled labour to take advantage of the opportunities continues to be a challenge, which has to be urgently addressed.
"There are at least two research activities being undertaken by the ministries of tourism, and labour and social security, which should provide the relevant data and information to adequately assess Jamaica's labour market situation, with respect to the availability of skills in growing areas. The results of these studies will, therefore, provide relevant information to inform future policy decisions with respect to training needs and options for satisfying any short-term gaps which may arise," he said.