August 26, 2021
Overview
- For April to June 2021, real GDP is estimated to have grown by 12.9%, relative to the corresponding quarter of 2020. The Goods Producing Industry grew by 7.8% while the Services Industries grew by 14.0%. Notably, the out-turn for the April to June 2021 period largely reflected the impact of the relaxation of measures implemented to manage the COVID-19 pandemic relative to the corresponding quarter of 2020.
- The growth during the period was influenced by the following: Increased domestic and external demand for Jamaica’s goods and services, consequent on relaxation of COVID-19 measures due mainly to the increased roll-out of vaccination efforts globally, with approximately 5.0 billion doses administered to date; Increased operating hours for businesses which facilitated higher capacity utilization rates and production levels; An increase in the implementation of residential and commercial building projects and road construction works; Improved weather conditions, which facilitated growth in the Agriculture and Electricity & Water Supply industries; Higher levels of employment relative to the closure of businesses and layoffs caused by the lockdown in the corresponding quarter of 2020, and Higher levels of Business confidence associated with the prospects for strengthened economic outturn in the short to medium term.
- The Goods Producing Industry expanded by an estimated 7.8% with growth in all industries except Mining & Quarrying which was negatively impacted by technical issues which affected alumina production, as well as shipping scheduling issues and lower demand, which impacted crude bauxite production.
- The Services Industry was estimated to have grown by 14.0% reflecting higher real value-added for all industries with the exception of government services which remained flat.
- For the first six months of 2021, real GDP is estimated to have grown by 2.3%. The Goods Producing Industry is estimated to have increased by 5.0% and the Services Industry by 1.4%. The industries which were estimated to have recorded the largest increases during the first half of the year were Construction (up 13.8%), Agriculture (up 3.9%), Other Services (up 3.6%) and Transport, Storage & Communication (up 3.4%).
Production Performance by industry
Real Value Added for the Mining & Quarrying industry contracted by an estimated 12.3%. This was due to lower Alumina and Crude Bauxite production. Alumina production declined by 11.3%, reflecting the impact of technical issues which affected the two refineries in operation. The Alumina capacity utilization rate declined by 5.5 percentage points to 42.2%. Crude bauxite production contracted by 31.8% due to reduced demand from third party customers. The bauxite capacity utilization rate decreased by 21.8 percentage points to 46.4%. While Real Value Added for the Construction industry grew by an estimated 18.3%, reflecting higher levels of activities in both the Building Construction and Other Construction components. Total sales of Construction input grew by 57.0% in real terms. The growth in the Building Construction component was due to increased Residential and Non-Residential Construction activities, reflecting an estimated increase in the Total Value of Mortgages disbursed by 35.2% and the Total Number of Mortgages disbursed by 29.9%. The estimated expansion in the Other Construction component was due to increased capital expenditure on civil engineering activities led by The National Works Agency’s work on the Yallahs to Harbour View leg of the Southern Coastal Highway, NROCC work on the SCHIP Part A and Jamaica Public Service Company’s expenditure associated with installation activities to facilitate the increased distribution and generation of power.
Output for the Agriculture, Forestry & Fishing industry was estimated to have grown by 10.3%. This out-turn primarily reflected the impact of improved weather conditions and increased demand associated with the relaxation of measures to contain the COVID-19 pandemic, particularly from related industries such as Hotels & Restaurants. Growth in the industry was driven by: Other Agricultural Crops, which grew by 17.6% reflecting higher production in eight of the nine crop groups. This performance was due to a rise in hectares reaped and output per hectare reaped. The most significant increases were recorded for Potatoes, up 28.3%; Vegetables, up 27.8%; and Condiments, up 20.2%. Production of Other Tubers contracted by 2.5%. Traditional Export Crops, which grew by 9.2%, largely reflecting higher production of Banana & Plantains, up 17.6% which outweighed estimated contractions recorded for Sugar Cane, Coffee and Cocoa production, as well as Animal Farming, which was estimated to have grown by 4.0%, attributed to increased broiler meat and egg production. With respect to Food, Beverages and Tobacco, higher levels of output were recorded for Edible Oils, up 19.8%; Edible Fats, up 26.8%; Poultry Meat, up 4.8%; and Beer & Stout, up 50.5%
Real Value Added for the Manufacturing industry is estimated to have grown by 3.1%, reflecting an uptick in both the Food, Beverages & Tobacco and Other Manufacturing components. The out-turn largely reflected the impact of increased demand associated with a partial recovery from the downturn recorded in the corresponding quarter of 2020 when COVID-19 management measures restricted output in the industry. Electricity & Water Supply recorded an estimated contraction of 7.1% in Real Value Added, due to decreases in both electricity and water consumption. Electricity consumption declined by 8.0% reflecting lower levels of consumption in all six categories: Residential, down 0.5%; General Service, down 12.6%; Power Service, down 10.4%; Large Power, down 12.4%; Street Lighting & Other including power interchange customers, down 8.8% and Largest Power, down 3.9%. Water consumption decreased by 3.0%, reflecting lower consumption in the Western division, down 12.1%, which outweighed increases in consumption in the Eastern division, of 1.8%.
Electricity & Water Supply recorded estimated growth of 4.0% in real value added, reflecting expansion in both electricity and water consumption. Electricity consumption increased by 4.3% reflecting higher levels of consumption in four of the six categories: General Service, Power Service, Large Power and Largest Power. Eight of the fourteen parishes recorded higher sales, with Westmoreland recording the largest increase (32.1%), followed by Hanover (27.9%) and St. James (20.7%). These increases are partially attributed to increased economic activities, especially within parishes that benefited from higher tourist arrivals. Water consumption grew by 2.9%, due to increases in both the Western division of 3.6%, and the Eastern division of 2.6%.
Real Value Added for the Transport, Storage & Communication industry grew by an estimated 16.5%. This resulted from growth in both the Transport & Storage and Communications components. The performance was supported by the relaxation of COVID-19 containment measures and was driven by growth in the Air transport subcomponent, largely reflecting increased passenger movements to 842,069, up from 38,408. Departures increased to 430,141 from 22,417 persons and Arrivals increased to 410,798 from 15,530 persons. Growth was also recorded in the Maritime transport subcomponent, due to an estimated 16.6% growth in cargo handled at the heavier weighted Port of Kingston.
Real Value Added for the Finance & Insurance Services industry was estimated to have grown by 2.5% during the review quarter. The performance reflected the impact of the relaxation of measures implemented to prevent the spread of COVID19 and resulted in an increase in the net interest income on the stock of loans at deposit taking institutions, and an increase in fees and commissions income.
Real Value Added in the Wholesale & Retail Trade; Repair & Installation of Machinery (WRTRIM) industry is estimated to have grown by 13.2% reflecting the combined impact of estimated growth in associated industries such as, Agriculture, Manufacturing and Construction, and the relaxation of measures associated with the management of the COVID19 pandemic which extended operational hours and the reduced restrictions on the movement of people. Real Value Added for the Hotels & Restaurants industry grew by an estimated 330.7%, reflecting a sharp increase in visitor arrivals following the closure of the islands borders to passenger movement for most of the corresponding quarter of 2020. Stop-over arrivals for April–May 2021 increased to 205,244 visitors compared with none during the corresponding period of 2020.
Outlook
The PIOJ noted that “for July–September 2021, growth in output is anticipated to be within the range of 4.0% – 6.0%. This based on the continued economic recovery in most industries following the relaxation of some of the COVID-19 containment measures, implemented in 2020; the gradual recovery of the global economy which augurs well for external demand for Jamaica’s goods and services; and continued recovery in the levels of employment as well as a strengthening in business confidence, which are expected to support domestic demand.”
Furthermore “These however could be adversely impacted by adverse weather conditions, downturn in the Mining & Quarrying Industry due the fire at the Jamalco refinery which caused damage to the powerhouse and the spread of new variants of the COVID-19 virus to the domestic economy resulting in the loss of productive time as stricter COVID-19 controls are enacted to combat these new waves of infection.”
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