Hotels, mining and quarrying contribute lion’s share to growth in June quarter
Published:Wednesday | August 28, 2019 | 12:26 AM
The Jamaican economy expanded by one per cent in the quarter to June this year, driven mainly by a 5.6 per cent increase in the hotels and restaurants sector, and a 4.5 per cent increase in mining and quarrying.
The outturn for the quarter largely reflected increased capacity utilisation at some industrial plants such as the Petrojam refinery and increased external demand, which drove output in some export industries such as hotels and restaurants, according to Planning Institute of Jamaica (PIOJ) Director General, Dr Wayne Henry.
Growth was also attributed to increased domestic demand, enabled by higher levels of employment which enabledrowth in industries such as the wholesale and retail trade, repair and installation of machinery, finance and insurance services, as well as manufacturing, among others.
The outturn was also reflected in the continued positive impact of the resumption of operations at Alpart, Jamaica’s largest alumina refinery, albeit at a slower rate of growth, said Dr Henry in reviewing Jamaica’s economic performance for the quarter at the PIOJ’s offices in New Kingston.
However, he said further growth in the economy was stymied by drought, which negatively impacted output in the agriculture industry and constrained growth in the food-processing component of the manufacturing industry, as well as the winding down of several major infrastructure projects in Kingston and St Andrew which had contributed significantly to growth in construction during the corresponding quarter of 2018.
The goods-producing industry is estimated to have remained flat during the review quarter. The outturn was largely attributed to the impact of improved performances by the mining and quarrying, as well as manufacturing industries, which were counterbalanced by a contraction in the agriculture, forestry, fishing and construction industries.
The agriculture, forestry and fishing industries contracted by an estimated 2.5 per cent, largely reflecting the impact of drought which stemmed from below-normal rainfall levels in all three months of the review quarter, resulting in lower production and output.
The increase in the mining and quarrying industry was attributable to increased output in alumina production, while manufacturing grew by 1.7 per cent, also due to increased output.
The construction industry contracted by 1.0 per cent due to the winding down of several major infrastructural projects and delays in the start-up of new ones scheduled to commence during this year.
The services industry grew by 1.4 per cent, while the electricity and water supply industries grew 0.2 per cent.
However, Dr Henry noted that water consumption fell by 2.8 per cent, due largely to drought which impacted the island during the quarter.
Transport, storage and communication grew by 1.4 per cent; the wholesale and retail trade, repair and installation of machinery industry was up 1.0 per cent; the finance and insurance services industry was up 1.8 per cent, while growth in the hotel and restaurant industries reflected an increase in foreign national arrivals.
Total stopover arrivals grew by 8.4 per cent and reflected stronger performance from Jamaica’s main source markets – the United States, Europe and Latin America.
However, stopover arrivals from Canada contracted by 4.8 per cent, and cruise passenger arrivals saw a 23.2 per cent decrease during the review quarter.
Notwithstanding, visitor expenditure increased by 10.2 per cent to US$852.7 million.
The PIOJ is projecting growth in the range of 0.5 per cent to 1.0 per cent for the July to September 2019 quarter, based on the anticipated strengthening of the performance of most industries relative to the similar quarter of 2018.