Jamaica’s Economy Records Growth

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Jamaica’s economy recorded a growth of 1.7 percent during the first quarter of 2019. This report came from the latest release from the Statistical Institute of Jamaica (STATIN). The release also showed that the level of economic growth recorded was due mainly to growth in the services and goods-producing industries. According to the STATIN data, the services sector grew by 1.8 percent while the goods-producing sector grew by 1.7 percent.

These growth numbers represent the total value added at constant prices. They are not much different from using the real gross domestic product (GDP).

Growth in the Goods Producing Sector

Encouragingly, all industries within the goods-producing sector recorded output at higher levels during the period. This sector did well when compared with the similar quarter in 2018. Increases were reported in agriculture, forestry, and fishing (0.3 percent), mining and quarrying (11.1 percent), and construction (3.4 percent). On the other hand, the manufacturing industry reported a decline in output of 1.4 percent.

According to the STATIN report, the growth in the agriculture, forestry and fishing sector was primarily due to the increased output of other agriculture crops sub-industry. This sub-sector includes animal rearing, forestry, and fishing. The growth level reported for this sector was 2.1 percent.

Increased production of alumina, which grew by 12.7 percent, accounted for the strong performance of the mining and quarrying sector. The fall in the output from the other manufacturing sub-industry contributed to the decline in output reported for the manufacturing industry.  This sub-industry suffered a 3.4 percent decline. However, the food, beverages and tobacco sub-industry saw a marginal growth of 0.1 percent.

Not surprisingly, the increased activity in building construction, civil engineering, and building installation accounted for the reported improvement in the construction sector. As more development projects come on stream, growth in the construction industry will continue to be recorded. Growth in Jamaica’s economy will be achieved as long as these sectors perform well.

Service Sector also Grew

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In the case of the service industry, STATIN reported that all eight of the services industries recorded growth. Hotel and restaurants at 7.3 percent, electricity, and water supply at 1.9 percent, and wholesale and retail trade, repairs, installation of machinery and equipment (1.3 percent) recorded increased output. In addition, the finance and insurance services (2.5 percent), transport, storage and communication (1.2 percent) and real estate, renting and business activities (1.0 percent) also showed growth, albeit at a lower level. Producers of other services (1.8 percent) and of government services (0.2 percent) rounded off the data on the services sector.

Economy Declined in the First Quarter 2019 Compared with Last Quarter 2018

However, compared to the fourth quarter of 2018, STATIN reported that Jamaica’s economy declined by 0.4 percent. This decline was as a result of reduced output from the goods-producing industries and the services industries. Consequently, these two industries recorded growth of less than one percent relative to the performance in the last quarter of 2018.

Marginal Growth in Fiscal 2018/2019 Compared to 2017/2018

When STATIN accounts for the fiscal year, however, the economic growth results are slightly different. There was a 1.9 percent growth in fiscal year 2018/2019 when compared with the performance of the fiscal year 2017/2018.

Evidently, the actual result of 1.9 percent growth during fiscal year 2018/2019 compares favourably to the government’s adjusted economic growth target of 1.8 percent in a fiscal year. Also, this economic growth performance lined up with the more conservative adjusted economic targets of the Government of Jamaica. However, it is not close to the “five percent in four years” that was initially stated by the Economic Growth Council.

That said, Jamaica’s economic growth performance, though modest, is a movement in the right direction.

 

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