PIOJ Reveals Top Growth Earners for September Quarter

The Planning Institute of Jamaica (PIOJ) says agriculture, forestry and fishing, mining and quarrying; and construction, topped the industries recording growth during the July to September quarter of the 2013/14 fiscal year, which grew by 0.6 per cent.

Director General of the PIOJ, Collin Bullock, who made the disclosure at a quarterly media briefing at the institute’s New Kingston offices, on November 20, said agriculture, forestry and fishing, and mining and quarrying both recorded second quarter growth of five per cent each, while construction grew by 2.5 per cent.

He noted that the agriculture, forestry and fishing industry’s growth reflected the impact of improved weather conditions and growth inducing initiatives implemented by the Government.

Mr. Bullock attributed the growth in mining and quarrying to increased output of the “heavier weighted alumina component”, and pointed out that crude bauxite production declined.

“Alumina production increased by 10.2 per cent, reflecting increased production by JAMALCO, up by 3.1 per cent, and at WINDALCO, up by 27.8 per cent. Crude bauxite production declined by 11.5 per cent due to a reduction in the planned production to facilitate dredging activities to expand capacity at the main bauxite port(s),” he explained.

The Director General indicated that growth in the construction sector reflected increased building development activities “due, largely, to an expansion in residential construction.” Additionally, he informed that the volume and value of mortgages increased by 71.7 per cent and 68.8 per cent respectively, relative to the corresponding quarter of 2012.

He added that growth in other construction activities resulted from increased capital expenditure by government and various government agencies. “There was an estimated increase in the building installation category, in line with the expansion in building construction,’” he  said.

Also recording relative growth was the hotels and restaurants sector, up 0.8 per cent. This, Mr. Bullock said, resulted from an estimated 0.7 per cent growth in stopover tourist arrivals consequent on an increase in the number of visitors coming from Canada, Europe, and Latin America.

Correspondingly, he added, airport activities were estimated to have increased due to a 3.5 per cent increase in total air passenger movements. Preliminary tourism data for October show that airport arrivals grew by 12.5 per cent and cruise passenger arrivals increased by 30.4 per cent.

The finance and insurance industry, which the Director General said grew by 0.4 per cent, reflected net interest income at deposit taking institutions as well as total assets, fees and commission income, and gains from foreign exchange transactions.

Additionally, he said the stock of loans and advances outstanding at commercial banks increased by 19.1 per cent, while noting that credit to the private sector accounted for approximately 92 per cent.

At the end of June 2013, non-performing loans, as a share of loans, was 5.9 per cent. This, Mr. Bullock pointed out, “compares favourably” with 7.4 per cent in June 2012.

Other industries recording growth include: transport , storage and communication; and wholesale, retail trade, repair and installation of machinery. Sectors recording declines include: manufacturing, and electricity and water supply.

Mr. Bullock said the short-term economic outlook and prospects for the October to December quarter are “positive,” with growth expected to be in the range of 0.5 to 1.0 per cent.

This, he explained, is based on an expectation of continued strengthening of productive activities in most industries which are expected to grow, with agriculture and construction projected to record the strongest growth.

Mr. Bullock said the PIOJ anticipates “strengthening” of confidence levels consequent on the successful completion of the second International Monetary Fund’s (IMF) quarterly review, for July to September.

“The PIOJ welcomes the indication of a return to economic growth following six quarters of economic contraction. We are (also) encouraged by indicators and reasonable projections of a continuation of economic recovery in the current quarter and to the end of the financial year,” he added.

Mr. Bullock, however, cautioned that the turnaround is of “modest proportions” and the growth being looked at “is still not where we want it to be.”

“This means that until the tendency to grow strengthens, it remains susceptible to reversal if there are any sufficiently adverse social or economic shocks,” he said.