Third-Quarter Fiscal Year Growth For Construction, Mining And Quarrying

The Planning Institute of Jamaica (PIOJ) is reporting that Construction and Mining and Quarrying grew by an estimated 6.2 per cent and six per cent, respectively, for the October to December 2020 quarter.

They were the only subsectors recording growth in the goods producing industry, which PIOJ Director General, Dr. Wayne Henry, said declined by an estimated 0.6 per cent.

Agriculture, Forestry and Fishing also recorded a 6.1 per cent decline, with Manufacturing also down by 3.4 per cent.
Overall, economic activity for the quarter contracted by about 9.4 per cent.

Giving a breakdown of the sector performance during the PIOJ’s digital quarterly briefing on Tuesday (February 23), Dr. Henry said the out-turn for Construction largely reflected increased civil engineering capital expenditure.

This, he informed, was led by the National Works Agency (NWA) spend, up 19.1 per cent to $3.8 billion, due to expenditure on the South Coast Highway Improvement project (SCHIP).

The Urban Development Corporation (UDC) also recorded a 51.1 per cent increase in expenditure, to $405 million.
Dr. Henry said the out-turn for Mining and Quarrying largely reflected increased alumina and crude bauxite production.

The Director General informed that alumina production increased by 6.9 per cent due to heightened activities at the two refineries in operation, which, he noted, were impacted by technical issues in the corresponding quarters in 2019, thereby curtailing output.

Additionally, he said crude bauxite production grew by 4.2 per cent, as a result of increased demand.

This was the first increase following five consecutive quarters of contraction, which were impacted by the closure of the JISCo Alpart alumina plant,” Dr. Henry pointed out.

The out-turn for the other two goods-producing industry subsectors saw Agriculture, Forestry and Fishing contracting by 6.1 per cent, and Manufacturing down 3.4 per cent.

Meanwhile, all five subsectors in the services industry, which contracted by 11.5 per cent, recorded declines.

Dr. Henry said Hotels and Restaurants, which captures the majority of tourism-related activities, fell by the highest margin of 52.8 per cent.

This, he noted, was influenced by an estimated decrease in foreign national arrivals, down 74 per cent, to 156,419 persons.

“Total stopover arrivals decreased by 72 per cent to 184,683 persons; there were no cruise passenger arrivals. Total visitor expenditure fell by 61.9 per cent to US$355.4 million,” the Director General informed.

Dr. Henry said the overall out-turn for the December 2020 quarter reflected the continued negative impact of coronavirus (COVID-19) cases globally and locally on economic activities, renewed restrictions and logistical challenges of COVID-19 vaccination programmes in some economies, the implementation of measures to manage the spread of the COVID-19 pandemic, decline in business and consumer confidence due to uncertainties regarding the duration and impact of the pandemic, and weakened demand associated with lower disposable income due to job losses and reduced work hours.

Dr. Henry said based on factors such as the uptick in COVID-19 cases globally and locally and the implementation of new measures to manage the virus, growth is expected to contract within the seven to nine per cent range for January to March 2021.

“If this forecast is realised, it would represent the smallest rate of quarterly contraction for fiscal year 2020/21 and may be indicative of a gradual return to normalcy in economic activities relative to the preceding quarters,” he pointed out.

Dr. Henry said that 2020/21 fiscal year growth is projected to contract by between 10.5 and 12.5 per cent.