Economy Grew By Estimated 1.5 Per Cent During June Quarter

The economy is estimated to have grown by 1.5 per cent during the April to June 2023 quarter, compared with the corresponding period last year.

Director General, Planning Institute of Jamaica (PIOJ), Dr. Wayne Henry, made the disclosure during the agency’s digital press conference on Thursday (August 17).

Dr. Henry said the out-turn for the review quarter largely reflected increased capacity utilisation in the mining and quarrying industry, the continuation of the growth momentum in tourism-related industries, increased demand spurred by higher levels of employment, as well as increased business and consumer confidence, relative to the corresponding quarter of 2022.

“Further growth was stymied by the impact of drought conditions on agriculture and water production, as well as relatively aged equipment in some industries, which resulted in unplanned downtimes,” he stated.

Regarding real sector developments, the goods-producing industry grew by an estimated one per cent with improved performance recorded for the mining and quarrying industry.

This was sufficient to outweigh contractions recorded for the manufacturing, agriculture, and construction industries.

The electricity and water supply industry recorded growth of 6.2 per cent in real value added, reflecting an expansion in electricity consumption.

“This increase was sufficient to mitigate the contraction recorded for water consumption,” Dr. Henry said.

Electricity consumption increased by 7.9 per cent reflecting higher sales for five of six categories: residential, up 4.3 per cent; general service (small businesses using less than 25 kilovolt ampere (kVa), up 6.4 per cent; power service (large businesses using more than 25 kVa but less than 500 kVa), up 4.6 per cent; large power (businesses using more than 500kVa), up 6.6 per cent; and largest power (single locations with a minimum peak demand of 2,000 kVa), up 35.2 per cent.

“These increases outweighed an estimated decline for street lighting and traffic signals, down 4.6 per cent,” Dr. Henry said.

He explained that 13 of the 14 parishes recorded higher sales, led by a 56.7 per cent increase in Clarendon, reflecting the resumption of operations at the JAMALCO plant.

Dr. Henry noted, further, that electricity sales in Kingston and St. Andrew grew by four per cent and continued to account for the largest share at 34.2 per cent.

Increases were also recorded for Trelawny (up 3.6 per cent); St. Ann (up 6.9 per cent); Westmoreland (up 9.6 per cent), and St. James (up 4.8 per cent), which benefited from higher tourist arrivals.

Additionally, the Transport, Storage and Communication industry grew by an estimated 5.2 per cent, due to increases in both the transport and storage and communication components.

“Improved performance was recorded for the air transport subcomponent, largely reflecting a 39.8 per cent increase in passenger movements due to departures, up 41.3 per cent, and arrivals, up 39.1 per cent,” Dr. Henry said, adding that air cargo movements also increased 104.3 per cent.

Meanwhile the agriculture industry contracted by 7.1 per cent.

The Director General explained that this out-turn primarily reflected the adverse impact of drought conditions, which resulted in a 7.7 per cent decline in the area of crops reaped, and a reduction in crop yield for most crop groups.

“The performance of the industry was due to an 11.8 per cent decline in the output of other agricultural crops. Lower production was recorded in seven of the nine crop groups, including potatoes, down 28 per cent; yam, down 15 per cent; vegetables, down 14.6 per cent; cereals, down 13.2 per cent and legumes, down 8.7 per cent,” Dr. Henry stated.

“Additionally, traditional export crops declined by 0.8 per cent, largely reflecting lower production of sugar cane, down 22.6 per cent; banana, down 0.2 per cent; and cocoa, down 56.4 per cent. These decreases outweighed an estimated 16.5 per cent increase in coffee production,” he added.

Animal farming was estimated to have grown by 1.8 per cent, attributed to increased broiler meat and egg production.

Real value-added for the mining and quarrying industry increased by 163.1 per cent, due to an expansion in alumina production, which outweighed a decrease in crude bauxite production.

The Director General informed that total bauxite production increased by 69 per cent, reflecting the combined effect of alumina production, up 271.8 per cent, due to the reopening of the Jamalco refinery.

He noted that the alumina capacity utilisation rate was 36.3 per cent, up 26.6 percentage points, compared with the corresponding quarter of 2022, and crude bauxite production, down 6.8 per cent. The bauxite capacity utilisation rate decreased by 3.4 percentage points to 47.1 per cent.

Regarding the manufacturing industry, this was estimated to have contracted by 0.6 per cent.

For the ‘Other Manufacturing Sub-Industry’, higher output was recorded within the chemicals and chemical products component with fertiliser, up 31.1 per cent; paint, up 57.9 per cent; and aluminium sulphate, up 9.4 per cent.

Non-metallic minerals are also estimated to have increased, supported by cement production, up 2.6 per cent.

“In contrast, the petroleum products component was estimated to have contracted due to lower production of heavy fuel oil, down 14 per cent; automotive diesel oil, down 10.2 per cent; and gasolene, down 4.6 per cent,” Dr. Henry said.

He explained that the lower output of petroleum products resulted from reduced operating days at the Petrojam Refinery, due to its closure for 33 days to facilitate maintenance activities.

This compared with closure of 31 days in the corresponding quarter of 2022.

Real value added for the construction industry decreased by 3.3 per cent, mainly reflecting a downturn in activities in the ‘Other Construction and Building Construction’ components.

Dr. Henry said the decline in the ‘Other Construction’ component was due to reduced capital expenditure on civil engineering activities reflecting National Works Agency, down 52.5 per cent to $2.4 billion, reflecting lower expenditure on the Southern Coastal Highway Improvement Project (SCHIP), and Port Authority of Jamaica, which disbursed $137.3 million, down 89.2 per cent, due to reduced expenditure on infrastructural developments.