Thu | Sep 20, 2018

Jamaican economy grew 1.8% in June quarter

Published:Friday | August 17, 2018 | 12:00 AMMcPherse Thompson

The mining and quarrying industry, which grew by 30 per cent, contributed the lion's share to the estimated 1.8 per cent expansion in the Jamaican economy for the April to June 2018 quarter, according to the Planning Institute of Jamaica, PIOJ.

Performing secondary to that sector was the agriculture, forestry and fishing industry, which increased by 10 per cent.

Director General of the PIOJ, Dr Wayne Henry, said the 1.8 per cent growth in gross domestic product (GDP) represents the strongest quarterly growth in approximately two years, that is, since the July to September quarter of 2016 when the economy expanded by 2.2 per cent.

The PIOJ is projecting real GDP growth within the range of 1.5 per cent to 2.5 per cent for the July to September 2018 quarter.

"The out-turn for the April to June 2018 quarter largely reflected improved weather conditions which facilitated increased output in industries such as agriculture, forestry and fishing, as well electricity and water supply," said Henry.

It also reflected the positive impact of resumption of operations at Jamaica's largest alumina refinery which strengthened the pace of growth, and higher levels of activities associated with road rehabilitation and construction, increased residential construction, and the construction and renovation of commercial buildings.

"However, further growth in the economy was stymied by plant downtime which negatively impacted output in the manufacture industry, as well as a decline in the average length of stay by foreign nationals, which adversely impacted real value added in the hotels and restaurants industry," the director general added.

The restaurants and hotels industry, which has hitherto experienced growth in successive quarters, declined by 1.5 per cent during the April to June 2018 quarter, reflecting a decrease in the average length of stay of foreign nationals by 6.7 per cent to 7.5 nights.

However, there was an increase in stopover arrivals of 5.2 per cent, while cruise passenger arrivals rose by three per cent, which contributed to an increase of 4.4 per cent in total visitor arrivals. During the review period, visitor expenditure increased by 4.4 per cent to US$723 million.

"This anomaly of a decline in real value added despite an increase in stopover arrivals may be attributed to a developing trend where visitors seek to maximise their experience through shorter stays and multiple destinations," said Henry.

"As such, hoteliers have introduced newer three- to five-day packages to cater to this segment of the market. This has contributed to a decline in the average length of stay by foreign nationals observed since mid-2017."

The increase in alumina production reflected the resumption of operations at Alpart in St Elizabeth.

mcpherse.thompson@gleanerjm.com