Date: November 19, 2019
The Planning Institute of Jamaica (PIOJ) held their Media Briefing today, discussing the review of the economic performance of Jamaica for the July to September 2019 period.
Dr. Wayne Henry, Director General of PIOJ, highlighted the macroeconomic performance for the July-September 2019, mentioning, “real GDP grew by an estimated 0.3 percent relative to the corresponding quarter of 2018.” Growth in Real GDP was due to a rise in the ‘Service Industry’ which recorded an estimated growth of 1.2 percent. However, the ‘Goods Producing Industry’ declined by 2.1 percent.
Overview of the Service Industry Performance:
- Finance & Insurance Services, documented the largest growth rates, up by 3.0 percent. According to the PIOJ, “this was due to an increase in the net interest income on the stock of loans at deposit taking institutions; growth in fees and commissions income and an estimated increase in the profitability of insurance companies.”
- Hotel & Restaurants expanded by 2.3 percent. This was due to an increase in Foreign National Arrivals which went up by 4.9 percent, consequently increasing the Total Stopover Arrivals. In addition, Total Visitor Expenditure grew by 5.7 percent to US$838.6 million.
- Other Services increased by 1.5 percent.
Production Performance by industry are as follows:
- Agriculture, Forestry & Fishing Industry, down by 0.2 percent. It should be noted that drought conditions that prevailed during the first two months of the quarter contributed to the decline. Moreover, lower output was booked for Traditional Export Crops, declining by 5.7 percent, depicting the lower production of sugar cane which fell by 57.3 percent and Banana by 3.4 percent.
- The Manufacturing Industry advanced by 1.6 percent. This performance was linked to increased output from the Food, Beverages & Tobacco and the Other Manufacturing sub-industries. “In addition, growth within the Other Manufacturing sub-industry resulted from the higher production of Petroleum Products which was facilitated by the refinery being in operations for all days during the quarter”, the PIOJ indicated.
- The Construction industry contracted by 1.5 percent during the period. The downturn in the Other Construction component which outweighed an estimated growth in the Building Construction component contributed to the decline. As mentioned by the PIOJ, “Reduced capital expenditure on civil engineering activities negatively affected the performance of Other Construction while the growth in the Building Construction component was supported by the increase in NHT Housing Starts and work-in-progress on previously started developments.”
- Mining & Quarrying Industry contracted by 18.5 percent reflecting reduced output of alumina and crude bauxite. According to PIOJ, “Alumina production went down by 19.8 percent owing to a 14.1 percentage points decrease in the Alumina Capacity Utilization rate to 59.3 percent. Furthermore, Crude Bauxite production also decreased by 6.4 percent due to 3.8 percentage points decrease in Bauxite Capacity Utilization rate to 56.7 percent. The decline in alumina production was due mainly to the operational closure of the Alpart in September 2019.”
- Electricity & Water Supply Industry increased by 0.7 percent. The outturn was as a result of higher electricity consumption, which outweighed the contraction in water consumption.
- Transport Storage & Communication Industry, produced a growth of 1.0 percent, which was driven by increased activities in the Transport and Storage component.
- Wholesale & Retail Trade, Repair and Installation of Machinery, grew by 1.0 percent. This was supported improved Business and Consumer confidence, increased employment and increased financing to the industry.
The Director General went on to state that, “the latest update undertaken by the Statistical Institute of Jamaica (STATIN) indicated that the employed labour force for July 2019 increased by 31,500 persons to 1,254,100 persons compared with July 2018. Notably, this was the highest level of employment during a single month. Additionally, the unemployment rate for July 2019 was 7.6 percent which was 0.6 percentage point lower than the rate recorded in July 2018.”
In concluding, the Jamaican economy is estimated to have grown by 0.3 percent for the July-September 2019 quarter based on early indicators. This growth out-turn was supported by several positive macroeconomic developments including the attainment of the lowest ever unemployment rate coupled with the highest level of employment which continues to drive domestic demand, the uptick in both business and consumer confidence, continued stability in the macroeconomic environment, evidenced by relatively low inflation, declining interest rates and an improved fiscal out-turn being recorded.
The General Director concluded his presentation by stating that, “it is therefore critical that we remain focused and disciplined as a country, as we intensify our efforts to realize greater levels of economic growth and sustained improvements in the well-being of our people. In addition, the Company is committed to making Jamaica the place of choice to live, work, raise families and do business.”
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