- The Planning Institute of Jamaica (PIOJ) is projecting that the economy will record growth ranging from 0.5 and 1.5 per cent for the January to March 2015 period.
- Director General of the PIOJ, Colin Bullock, says the 2015 first quarter economic outlook is based on positive short-term prospects for several key sub-sectors in the goods producing and services industries.
- Mr. Bullock said notable among these sub-sectors are hotels and restaurants and construction, which were among the top three performers during the December 2014 quarter, recording growth of 5.4 and 1.2 per cent, respectively.
The Planning Institute of Jamaica (PIOJ) is projecting that the economy will record growth ranging from 0.5 and 1.5 per cent for the January to March 2015 period, recovering from a 0.3 per cent fourth quarter contraction during the 2014 calendar year.
Director General of the PIOJ, Colin Bullock, says the 2015 first quarter economic outlook is based on positive short-term prospects for several key sub-sectors in the goods producing and services industries, some of which contracted during the October to December 2014 period.
Speaking at the PIOJ’s quarterly media briefing on February 24, at the Institute’s New Kingston offices, Mr. Bullock said notable among these sub-sectors are hotels and restaurants and construction, which were among the top three performers during the December 2014 quarter, recording growth of 5.4 and 1.2 per cent, respectively.
The Director General said growth in hotels and restaurants resulted from an estimated seven per cent increase in stopover visitor arrivals, mainly from the United States, Canada, Europe and Latin America. Additionally, he said cruise ship arrivals also increased by 18.2 per cent.
“This resulted in total visitor expenditure amounting to US$538.7 million, an increase of 7.4 per cent, relative to the corresponding quarter of 2013,” he informed.
Mr. Bullock said preliminary data for January 2015 indicated that stopover and cruise passenger arrivals grew by seven and 11.5 per cent, respectively.
As it relates to construction, the Director General noted that the sub-sector grew by 1.2 per cent during the quarter under review, reflecting higher levels of output for some components. These, he outlined, include: increased building activities, due largely to expanded hotel construction and renovation.
Additionally, he said growth in the “other construction component” was due to increased expenditure on civil engineering activities.
These, Mr. Bullock explained, include: $11 billion disbursed by the National Road Operating and Constructing Company (NROCC) for October to December 2014, compared to $3.8 billion for the corresponding quarter in 2013.
“(The) expenditure was for work being conducted on the North-South leg of the Highway 2000 project, specifically the continuation of work on the Caymanas to Linstead and Moneague to Ocho Rios legs of the highway,” he outlined.
Mr. Bullock said the Port Authority of Jamaica disbursed $57 million, compared with $16.2 million in 2013, adding that “continued strengthening is projected for the construction industry.”
Another sub-sector recording significant growth during the December 2014 quarter was transport, storage and communication, up 1.6 per cent.
“The increase in the transport component was spurred by a 7.5 per cent increase in total air passenger movements, largely reflecting increased stopover visitors; and a 0.8 per cent increase in the volume of maritime cargo handled at the island’s seaports, reflecting increased activities at the Port of Kingston (up 14.9 per cent),” he informed, noting that “activities at out-ports declined by 5.2 per cent, largely reflecting reduced exports of alumina.”
Telecommunications, he added, is estimated to have grown due to “increased competition” among the main service providers, relative to the corresponding quarter of 2013.
Other subsectors recording increases include: real estate, renting, and business activities, 0.5 per cent; finance and insurance services, 0.3 per cent; and wholesale and retail, repair and installation of machinery, 0.2 per cent.
Notable contractions for the December 2014 quarter include: agriculture, forestry and fishing, -11 per cent; manufacturing, -2.5 per cent; and mining and quarrying, -2.2 per cent. Also declining were: electricity and water supply, -2.7 per cent, and producers of government services, -0.2 per cent.
Mr. Bullock said the decline in agriculture reflected the impact of protracted drought conditions, which prevailed during the September quarter.
“During the review quarter (domestic) crops fell by 15.2 per cent, with lower output recorded for all nine crop groups. The most significant declines were recorded for cereals, down 24 per cent; condiments, down 19.7 per cent; vegetables, down 14.9 per cent; fruits down 10.5 per cent; and potatoes, down17.3 per cent. Traditional export crops fell by 13.0 per cent, reflecting the impact of lower production of banana, down 1.8 per cent; and coffee down 2 per cent. In addition, there was no sugarcane processing due to the late start of the crop season,” he outlined.
Mr. Bullock said the decline in mining and quarrying reflected a 3.7 per cent reduction in alumina production, “which outweighed an increase of 2.6 per cent in crude bauxite production.”
“The decline in alumina production stemmed from technical challenges at one plant, due to the relatively low quality of bauxite used in the production process. During the quarter, the Alumina Capacity Utilization Rate at alumina refineries declined to 43.1 per cent, down 1.7 percentage points. The Bauxite Capacity Utilization Rate increased to 94.4 per cent, up 2.4 percentage points compared with the corresponding quarter of 2013,” he outlined.
Mr. Bullock said, said overall, the services industry grew by 0.7 per cent, while the goods producing industry declined by -0.3 per cent, over the December 2014 quarter.
The Director General said the economy is estimated to have grown by 0.4 per cent for the 2014 calendar year, compared to 0.2 per cent the previous year.
Additionally, he said real growth for the 2014/15 fiscal year, ending March 31, “is projected to fall within the range of 0 to one per cent.”