JIS News

The Jamaican economy grew by 2.5 per cent last year, which was the best performance in more than 12 years. The Government’s management of the economy leading to this result has been commended by both local and international economists, including officials of the Washington-based International Monetary Fund. However, there continues to be criticisms about the economy’s ability to create jobs, leading to a perception of what economists call “jobless growth”.
But a closer examination of the employment figures point to a much different reality. In recent years in fact, the Jamaican economy has created thousands of net new jobs. A net new job is created when a lost job is replaced by two new jobs. So, if for instance, a factory with 600 workers is closed, a net new job is created when one or more other business activities create 601 new jobs.
The statistics indicate that the Jamaican economy created close to 73,000 net new jobs in the two years up to April 2006. This is close to 3,000 net new jobs for each month of the year.
This increase in new jobs is being fueled by growth in the construction and real estate sectors, producing thousands of new hotel rooms in particular. Mega-projects in the north coast resort areas of Negril, Montego Bay and Ocho Rios and now, Lucea, have been fueling the boom.
The impact of tourism-based construction on job creation is only part of the picture. There are also spin-offs from several major government-driven infrastructure developments including Highway 2000, the North Coast Highway, expansion of the island’s two international airports and new water supply projects.
The increase in residential building has also played a role in spurring growth in the construction sector. Up to two years ago, almost 20,000 mortgages were issued in one year.
Construction is, however, not the only sector that has generated thousands of new jobs in recent years. Other sectors such as tourism have also figured prominently. In addition to its impact during the construction phase, new hotel developments have significant job creation effects during their operational stages.
According to industry figures, each new hotel room generates one additional job. With a total of 2,500 new hotel rooms built in the past three years, the sector has created approximately 2,500 new direct jobs, with thousands more indirect employment opportunities in agriculture, chemical sales, farming, transportation and entertainment.
The distribution sector has also provided a fair number of new jobs. The Statistical Institute of Jamaica says the sector accounts for almost $1 out of every $4 spent in the Jamaican economy. This area grows whenever there is growth in any other sector that requires transportation of goods and personnel.
The rapid expansion in recent years of the network of fast food operations such as KFC, Juici Patties, Tastee and Island Grill, is a case in point. The massive growth in the size of their network over the past decade has led to new direct jobs as well as work for transport and service providers.
Another area which has seen substantial growth generating new jobs is the financial services sector. Since 2004, Insurance Company of the West Indies, First Global Bank, FirstCaribbean International Bank and RBTT Bank, have together added close to 20 new branches creating hundreds of new jobs.
The same is true in a number of other areas such as real estate services and health care.

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