Jamaica News: The Planning Institute of Jamaica (PIOJ) is reporting that the economy grew by an estimated 0.3 per cent for the July to September 2019 quarter, relative to the corresponding period last year.
Speaking at the PIOJ’s quarterly briefing at the Institute’s head office in New Kingston on Tuesday (November 19), Director General, Dr. Wayne Henry, said this represents the 19th consecutive quarter of economic growth that the country has recorded.
“The projected out-turn… largely reflected the positive impact of increased domestic demand, pushed by record levels of employment, increased consumer and business confidence levels, which spurred investment and consumer demand, and continued stability in the macroeconomic environment. This augured well for the business environment,” the PIOJ Head noted.
Dr. Henry said the out-turn for the September 2019 quarter was driven by an estimated 1.2 per cent growth in the services industry, despite a 2.1 percentage point contraction in the goods producing industry.
He noted that all services group subindustries grew, led by Finance and Insurance Services, which recorded the biggest out-turn across all sectors – three per cent.
“This was due to an increase in the net interest income on the stock of loans at deposit-taking institutions, an increase in fees and commissions income, and an estimated increase in the profitability of insurance companies,” the Director General said.
Other notable out-turns were recorded for Hotels and Restaurants, up 2.3 per cent; Transport, Storage and Communication, and Wholesale and Retail Trade, Repair and Installation of Machinery, both up one per cent; Real Estate, Renting and Business Services, up 0.8 per cent; and Electricity and Water Supply, up 0.7 per cent.
Dr. Henry said the out-turn for Hotels and Restaurants reflected an increase in foreign national arrivals, up 4.9 per cent, adding that visitor expenditure grew by 5.7 per cent to US$838.6 million.
“Preliminary data showed that airport arrivals increased by 7.4 per cent, while cruise passenger arrivals declined by 16.7 per cent for October 2019,” he informed.
Dr. Henry indicated, however, that all but one subsector in the Goods Producing Industry group contracted.
The sole standout was manufacturing, which he said grew by 1.6 per cent, “reflecting expansions in the food, beverage and tobacco, and the ‘other manufacturing’ subindustries”.
The Director General said Mining and Quarrying recorded the largest decline across both groups, contracting by an estimated 18.5 per cent, adding that “this reflects declines in both the output of alumina and crude bauxite production”.
“Alumina production decreased by 19.8 per cent to 553 kilotonnes. This was largely the result of lower levels of output by Alpart, due to the operational closure of the refinery during the quarter.
Crude bauxite production contracted by 6.4 per cent, to 764.5 kilotonnes… and this reflected the impact of lower demand from overseas purchasers,” he further informed.
Dr. Henry also advised that construction contracted by an estimated 1.5 per cent, reflecting a decline in the ‘other construction’ component, noting that this outweighed growth in building construction.
He pointed out that the contraction in the ‘other construction’ component largely resulted from declines in capital expenditure on civil activities, due mainly to a reduction in National Works Agency (NWA) disbursements during the period.
This figure fell to $2.7 billion, down from $7.1 billion in the September 2018 quarter.
“This fall in disbursement largely reflected the winding down of several major infrastructure projects as well as delays in the start-up of new projects scheduled to commence during this [2019/20] fiscal year,” the Director General informed.
Additionally, he said there was a 10.9 per cent decline in National Water Commission programmed expenditure, to $1.1 billion; and 22.3 per cent contraction in the Port Authority of Jamaica’s spend, to $764.2 million, down 22.3 per cent.
These, Dr. Henry said, were further compounded by a 2.1 per cent decline in the sale of construction inputs, adding that “cement supplied to the local market also contracted, recording a downturn of 17.6 per cent”.
Conversely, he said the building construction component was supported by increased activities in both the residential and non-residential categories.
Dr. Henry advised that within the residential construction component, housing starts by the National Housing Trust (NHT) increased by 43.2 per cent to 875 units, relative to the corresponding quarter of 2018.
He further pointed out that the total value of NHT mortgages increased by 50.3 per cent to $8 billion while the number of mortgages disbursed climbed by 15.6 per cent.
“Residential construction continued to be boosted by the relatively high levels of work in progress by the NHT, associated with a strong increase in housing starts in previous quarters… particularly the 4,337 new starts recorded during January to March 2019 and the 999 units started during April to June 2019,” the Director General indicated.
Meanwhile, he said the non-residential component benefited from new and ongoing construction, expansion and renovation works at several resort properties, adding that the construction of several commercial properties “is ongoing”.
In the meantime, Agriculture, Forestry and Fishing declined marginally by 0.2 per cent, due mainly to drought conditions over the first two months of the review period.
Dr. Henry said the economy is estimated to have grown by 1.2 per cent for the first nine months of the 2019 calendar year, between January and September.
This resulted from the growth of 1.6 per cent in the Goods Producing Industry, and 0.1 per cent in the Services Industry.
Dr. Henry, who pointed out that the inflation out-turn for the September 2019 quarter was 2.3 per cent, said it is projected that growth for the October to December quarter will range between zero and one per cent.
Source: JIS News