First Look

ECONOMY RECORDS GROWTH AGAIN FOR JULY to SEPTEMBER, 2018 QUARTER



Planning Institute of Jamaica | 2018-11-27 10:59:00

The Director General, Planning Institute of Jamaica, Dr. Wayne Henry, reported at the Institute’s quarterly press briefing, that the economy continued to record growth during the second quarter of the fiscal year. For July–September 2018, real Gross Domestic Product (GDP) is estimated to have increased by 1.9 per cent relative to July–September 2017. This follows a real GDP growth of 2.2 per cent recorded for the April–June quarter. During the July–September quarter, Real Value Added in the Goods Producing Industry grew by 5.2 per cent, while Real Value Added for the Services Industry expanded by 0.8 per cent.  The improved economic performance was pushed mainly by increases in the Mining & Quarrying (54.0 per cent), Construction (3.0 per cent) and Hotels & Restaurants (2.0 per cent) industries. Growth was also recorded for the Agriculture Forestry & Fishing (0.7 per cent) industry. This performance was, however, negatively impacted by drought conditions which caused low yields and crop losses. Within the Services Industry, all industries recorded increases, with the exception of Electricity & Water Supply, down 0.1 per cent.

The Director General noted that the performance during the quarter took place against the background of continued macroeconomic stability, with modest inflation of 3.1 per cent; low interest rates; an improved fiscal out-turn; an uptick in both business and consumer confidence; and increased construction activities, associated with the expansion of the road network, building of new hotels, and other commercial buildings. Dr. Henry also revealed positive indicators for the Labour Market. The unemployment rate for July 2018 was 8.4 per cent compared with a rate of 11.3 per cent in July 2017. This is the lowest unemployment rate on record, that is, since 1968. The employed labour force increased by 12 800 persons to 1 226 400 persons relative to July 2017.  This represents the highest level of employment ever for a single month. There was a decline in Jamaica’s Labour Force for July 2018 by 30 100 to 1 338 200 persons relative to July 2017. This out-turn in the employment figures continues the trend of establishing record levels of employment observed since mid-2016.

The outlook for the October–December 2018 quarter is positive. Real GDP for the October to December 2018 quarter is expected to grow within the range of 1.5 per cent to 2.5 per cent.  Growth is expected to be led by Mining & Quarrying, due to increased capacity utilization in the Alumina subindustry, reflecting the impact of increased production by Alpart; Hotels & Restaurants, facilitated by increased room stock, resulting from the renovation and expansion of existing properties and construction of new hotels; and Construction, reflecting the intensification of road construction activities which will be accompanied by increased capital expenditure by the NWC for improvement to the potable water and sewer systems.  The ongoing construction of the new JPS 190 Megawatt Liquefied Natural Gas plant at a cost of US$330.9 million will also continue to boost growth in the short-term.  The plant is scheduled for commercial operation by June 2019.




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