February 13, 2018. 

Mr. Wayne Henry, Director General for PIOJ started the press briefing by providing the main highlights of the macroeconomic performance for the October to December 2017 quarter. The following were noted:

Overview of Real Industry Developments

• For October-December 2017, real GDP grew up an estimated 1.1 per cent relative to the corresponding quarter of 2016. The Goods Producing and Services Industries were estimated to have grown by 1.2 per cent and 1.0 per cent respectively.
• Within the Goods Producing Industry, increases in real value added for the Mining & Quarrying (up 15.0 percent), and Construction (up 1.0 per cent) industries outweighed declines in Agriculture, Forestry & Fishing (down 1.0 per cent) and Manufacture (down 0.2 per cent).
• All industries within the Services Industry recorded growth for 2017. The industries estimated to have registered the largest growth rates were Hotels & Restaurants (5.7 per cent) and Transport, Storage & Communications (1.2 per cent).
• For 2017, real GDP was estimated to have increased by 0.5 percent. The Service’s Industry was projected to have grown by 0.8 per cent while the Goods Producing Industry declined by 0.7 per cent. The industries estimated to have recorded the largest increases in real value added during 2017 were Manufacture; and Hotels & Restaurants.

Other Macroeconomic Highlights

• Inflation for the review quarter was 1.5 per cent. The main contributors were Food & Non Alcoholic Beverage (up 2.2 per cent) and Housing, Water, Electricity, Gas & Other Fuels (up 2.0 percent). This reflected the impact of (i) Adverse weather conditions, which led to a shortage of domestic produced food; and (ii) higher energy prices.
• The total labour force for October 2017 decreased by 6500 persons to 1347,600 persons compared with the October 2016. Relative to October 2016, the employed labour force increased by 27 300 persons to 1 206 800 persons. The umeployment rate for October 2017 was 10.4 per cent compared with the 12.9 per cent in October 2016, the lowest since October 2008.

Production Performance by industry

• Real value added for Agriculture, Forestry & Fishing decreased by 1.0 per cent. Performance for the quarter was attributed to above normal rainfall levels, which caused flooding and resulted in the destruction of crops, impeded land preparation and curtailed planting activities. There was a decline in output in Other Agricultural Crops (down 4.0 percent) reflecting declines in six crop groups. However, there was an increase in Traditional Export Crops (up 11.1 per cent).
• Real value added for Mining & Quarrying industry grew by 15.0 per cent. This ut-turn reflected higher crude bauxite and alumina production of 45.6 per cent and 11.6 per cent, respectively. The increase in aluminium production reflected mainly the resumption of operations at the Alpart alumina refinery.
• The Manufacture industry registered a decrease of 0.2 per cent. This decline resulted from a contraction in Other Manufacturing sub-industry, which outweighed an increase in the Food, Beverages & Tobacco sub-industry. The decrease in Other Manufacturing sub-industry was due mainly to declines in production of Petroleum Products and Non-Metallic Minerals.
• Real value added for the Construction industry grew by 1.0 per cent. The higher value added was due to the increased activities in the Building Construction. Growth in the Building Construction component was supported by an increase in the value of mortgages provided by MHT as well as work –in-progress on previously started developments.

After proving the main highlights of macroeconomic performance for the quarter, Mr Henry then provided a short term outlook for quarter January to March 2018.

He stated that the short term prospects for the Jamaican economy are positive based on:

1. The continued strengthening of productive activities in both the Goods Producing and Services Industry, was led by the continued recovery of the Mining and quarry industry as the Alpart alumina refinery is expected to gradually increase its capacity utilization in the upcoming quarters
2. Recovery in the Agriculture, Forestry and Fishing industry was observed as weather conditions continue to improve. It is anticipated that the Other Agriculture Crops group will record increased output driven by short term crops. With respect to export crops, normal production activities at the sugar factories will board well for increased output during this crop year, relative to the uncertainty regarding financing and subsequently delayed start up during the corresponding period of 2017.
3. The performance of the Construction Industry is expected to be boosted by increased road rehabilitation and repair works, namely the Road Infrastructure Projects under the Major Infrastructure Development Programme (MIDP), including the Barbican Road and Constant Spring Road Rehabilitations Projects, The Mandela Highway Improvement Project as well as increased road rehabilitation projects following the destructions caused by heavy and prolonged rainfall during 2017. As well as continued upkeep in building construction activities reflecting the higher levels of residential and non-residential building construction
4. Growth in the Hotels & Restaurants Industry with preliminary data for January 2018 indicates an increase in stopover arrivals by 6.8% as well as an increase in cruise passengers arrivals by 21.3%.

In light of these above mentioned factors, Mr. Henry stated that PIOJ expects real GDP for the January to March 2018 quarter to grow within the range of 1 to 2%. The growth in Real GDP for the fiscal year 2017/2018 is projected to fall within the range of 0.5 % to 1.5%.

Mr. Henry however noted that there are key upside potentials and downside risks to these four tasks.

 Key upside potentials

1. Stronger than projected domestic demand associated with expected increase in employment and an increase in the access to loans and advances.
2. Stronger than expected external demands especially impacting the tourism sector
3. Higher than expected capacity utilization at production plants especial within the Mining & Quarry Industry.

Key downside risk

1. Larger than expected negative impact of heavy rains and flooding on the economy particularity the Agriculture, Forestry and Fishing Industry
2. Plant downtime associated with relatively aged equipment especially within the Mining & Quarrying and Manufacturing Industry
3. Slower than expected growth in the economies of Jamaica’s main trading partners as this may negatively impact external demand for goods and services

Ms. Elizabeth Emanuel, PIOJ’s Programme Director Vision 2030 Jamaica Secretariat, then turned the attention to provide an update under Jamaica’s dashboard of indicators as captured under Vision 2030 Jamaica National Development Plan. She presented on six of the sixty seven national outcome indicators monitored under Vision 2030 Jamaica for which data for the quarter was available.

An overview of the performance shows progress in five of the seven indicators and a decline in two, these were ease of doing business rank and murders per 100 000 population. She noted that:

Labour Force certification improved slightly with an average of 25.3% of the total labour force having vocational or professional certification based on the labour force survey for October 2017, an increase of 0.9% from 24.4%in the October 2016 survey. She also noted the labour force certification of males in 2017 was 2.0% higher than in 2016 while females recorded a 0.6% decrease despite recording higher labour force certifications than males in October 2017, 33.6 % for females compared to the 18.1% for males.

‘Category one crimes’ which include murder, shooting, rape, aggravated assault, robbery, break ins, and larceny totalled 57 per 100 000 population for the period October to December 2017, a decrease of 8% over the similar period in 2016 where 62 category one crimes per 100 000 population were reported. For the calendar year January – December, 238 Category one crimes per 100 000 population were reported, equal to the category one crimes reported in 2016.

Notably, murder rates per also reported separately. For the October to December period, 15.0 murders per 100 000 population was reported compared with 14.8 murders per 100 000 population reported in the corresponding period 2016. For the calendar year January to December, a total of 59.2 murders per 100 000 population were reported an increase of 19.4% from the 49.6 murders per 100 000 population over the similar period in 2016.

Jamaica moved down 3 places to a rank of 70^th out of 190 counties in the ease of doing business ranking. According to Ms. Elizabeth Emanuel, Jamaica’s Infrastructure index score increased to 4.09 up from 3.90 in 2016. This reflected the improvement in the quality of electricity supply and mobile cell phone subscription per 100 of the population.

With respect to energy, the percentage of renewables in the energy mix increased to 11.2% in 2017 up from 10.5% in 2016.

In concluding, Mr, Henry restated that the Jamaican economy is estimated to have grown by 1.1% for the October to December quarter, the strongest quarterly growth recorded during the calendar year. This brings the real GDP growth for calendar year 2017 to 0.5%, the 5^th consecutive year of growth. He however also noted that this represents a lower than projected performance compared with the initial growth forecast within the 1 to 2% range. He added that this performance was below expectation as downside risk growth states at the beginning of the year materialized.