February 18, 2022
- For the October – December 2021 quarter, real GDP is estimated to have grown by 6.0%, relative to the corresponding quarter of 2020.
- The estimated out-turn was influenced by the following: 1. The continued relaxation of COVID-19 containment measures globally, which facilitated increased domestic and external demand, resulting in a general uptick in economic activities. 2. Increased operating hours for businesses, which facilitated higher capacity utilization rates and production levels. 3. Higher levels of employment, as firms either resumed or ramped up operations. 4. Increased Business and Consumer confidence, associated with the prospects for strengthened economic out-turn and increased employment in the short to medium term.
- The Goods Producing Industry is estimated to have increased by 0.4%, due to improved performances in two of the four industries, namely Agriculture, and Construction.
- The Services Industry was estimated to have grown by 7.8%, relative to the corresponding quarter of the previous year, reflecting higher Real Value Added for all Industries.
- For the calendar year 2021, real GDP was estimated to have increased by 4.4%. This reflected higher Real Value Added for both the Goods Producing Industry, up 4.4% and the Services Industry, up 4.4%. All industries recorded growth in output, except for the Mining & Quarrying industry. Growth during 2021 was led by Hotels & Restaurants, up 36.4%; Construction, up 9.1%; Agriculture, Forestry & Fishing, up 7.9%; and Wholesale & Retail Trade; Repairs: Installation of Machinery & Equipment, up 6.6%.
Production Performance by industry
Real Value Added for the Hotels & Restaurants industry was estimated to have grown by 76.2%. Stopover visitor arrivals for the months of October and November 2021 increased by 186.3% relative to the similar period of 2020. The performance of the industry benefitted from increased vaccination and the relaxation of the previously implemented Public Health and Social Measures (PHSM) in Jamaica’s main source markets, as well as initiatives such as the establishment of a resilient corridor, domestically. Cruise passenger arrivals for the months of October and November, totalled 32,719 from 24 ship calls, relative to none during the corresponding period of 2020.
Real Value Added for the Mining & Quarrying industry decreased by 64.7%, due to declines in both alumina and crude bauxite production. Alumina production decreased by 75.3%, largely due to no production at the JAMALCO refinery, which was impacted by a fire at the powerhouse, resulting in a cessation of operations since September 2021. The capacity utilization rate at alumina refineries decreased to 10.1%, down 30.6 percentage points. Crude Bauxite production fell by 12.6%, reflecting the impact of lower demand from overseas purchasers, hence the bauxite capacity utilization rate decreased to 51.4%.
Real Value Added for the Agriculture, Forestry & Fishing industry, was estimated to have grown by 12.1%. This improvement reflected the impact of increased demand, particularly from the Tourism sector, which grew consequent on the relaxation of previously implemented COVID-19 measures. Also positively impacting the industry was the continuation of measures implemented to improve output in the industry. The industry’s performance benefitted from a 13.9% increase in hectares of domestic crops reaped, reflecting improved weather conditions relative to the corresponding quarter in 2020, when the industry was negatively impacted by heavy rains. Growth was driven by higher output in the Other Agricultural Crops and Traditional Export Crops sub-components. Other Agricultural Crops, was estimated to have grown by 18.0%, reflecting higher production in all nine crop groups. Output of Traditional Export Crops, increased by 4.6% while Animal farming is estimated to have decreased by 3.1%.
Real Value Added for the Manufacturing industry declined by an estimated 0.9%, due to a reduction in output in the Other Manufacturing sub-industry, which outweighed an estimated increase in the Food, Beverages & Tobacco sub-industry. Other Manufacturing was estimated to have contracted, reflecting a decline in the production of Petroleum Products, due largely to the closure of the plant for approximately 44 days to facilitate maintenance activities. Production of all Petroleum Products surveyed declined while the Food, Beverages & Tobacco sub-industry was estimated to have grown.
Real Value Added for the Construction industry increased by 6.4%, mainly spurred by growth in both the Other Construction and Building Construction components. This performance was reflected in a 16.6% real increase in the sales of construction-related inputs. Growth in the Other Construction component was due to an increase in capital expenditure on civil engineering activities by: The National Works Agency, which disbursed $11.2 billion, up 192.9% relative to the corresponding quarter of 2020. Disbursement was largely for work on the Yallahs to Harbour View leg of the Southern Coastal Highway Improvement Project (SCHIP), and JPS, which disbursed $3.9 billion, up 69.5%. The estimated growth in the Building Construction component was influenced mainly by a 2.7% increase in housing starts, as well as a 36.2% increase in the value of mortgages by the NHT.
The Electricity & Water Supply industry was estimated to have recorded growth in Real Value Added of 5.7%, reflecting an increase in electricity consumption, which outweighed a contraction in water consumption. Electricity consumption grew by 8.0% due to higher usage in all six categories. All 14 parishes recorded increased electricity sales, led by Clarendon, up 30.1%; Trelawny, up 17.2%; and Westmoreland, up 13.8%. Kingston & St. Andrew continues to account for the largest share of electricity sales (35.7%), followed by St. Catherine (15.7%), and St. James (12.0%). Water consumption fell by 2.6%, reflecting a contraction in the Eastern Division (down 4.6%), which outweighed an increase in the Western Division (up 1.7%). A total of 9 of the 14 Parishes recorded contractions.
Real Value Added for the Transport, Storage & Communication industry grew by 8.0%, mainly due to higher levels of activity in the Transport & Storage component, while the Communication component remained flat. The out-turn was driven by: 1. An improvement in the air transport component, largely reflecting growth in passenger movements up 159.4%, due to Departures, (up 172.3%); and Arrivals, (up 148.0%). 2. Increased maritime transport activities, reflecting a 21.2% increase in cargo handled at the heavier weighted Port of Kingston. This outweighed an estimated 32.7% decline in cargo volumes handled at Outports.
Real Value Added for the Finance & Insurance Services industry was estimated to have grown by 2.0%. The performance was influenced by: Increased profitability of deposit-taking institutions, reflecting a rise in economic activities, employment and growth in business and consumer confidence; as well as higher Fees and Commission income.
Real Value Added for the Wholesale & Retail Trade; Repair & Installation of Machinery (WRTRIM) industry was estimated to have grown by 9.6% due to higher demand stemming from: 1. Increased employment of 76,600 persons 2. Increased net remittance inflows by 10.9% to US$ 837.9 million 3. Growth in the related Construction and Agriculture, Forestry & Fishing industries, and the 4. Relaxation of COVID-19 containment measures.
Outlook
The PIOJ noted that “Economic growth is anticipated for the remainder of this fiscal year. For January to March 2022, it is projected that the economy will grow within a range of 5.0% to 7.0%, resulting in a Fiscal year growth (i.e. April 2021 to March 2022) in the range of 7.0% to 9.0%. For Fiscal Year 2022/23, the projection is for growth within the range of 3.0% to 6.0%.”
Furthermore “The recovery process is uneven across industries, as the performance of some industries were not significantly affected by the pandemic and have already surpassed their pre-COVID levels of output, while industries that were significantly affected, require a longer time to recover. Note also that the pre-Covid19 employment level is projected to be achieved in FY2022/23.,” as indicated by the PIOJ.
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