There are signs of life in the economy — PIOJ
“THERE are signs of life in the economy,” Colin Bullock, director general of the Planning Institute of Jamaica (PIOJ), reported yesterday at the quarterly press briefing, which took place at the institute’s Oxford Road location in New Kingston.
Bullock’s announcement comes against the background of reported growth in GDP for the July-September 2015 period. “…Real GDP grew by an estimated 1.5 per cent relative to the corresponding period of 2014,” he stated, adding: “This represents the strongest growth since April, and is largely due to a recovery in the manufacturing sector.”
The manufacturing sector experienced growth of 9.7 per cent, the highest of the industries and contributed 0.8 per cent of GDP growth. Similarly, the PIOJ quarterly review also showed an increase in construction, which was attributed to roadway work on the north-south Highway 2000; hotel renovation and expansion, with some 2,500 rooms being added; construction of new office buildings for the business process outsourcing (BPO) sector; and construction of renewable and/or alternative energy plants.
Despite drought conditions this year, agriculture, forestry and fisheries also grew by 3.3 per cent, having experienced improved production levels from the agro-parks projects.
There was, however, a decline in mining and quarrying, which recorded 1.0 reverse growth. Bullock explained that the decline was as a result of “lower production of alumina, which outweighed an increase in the output of crude bauxite”, as well as production challenges at Windalco where alumina production fell by 4.5 per cent.
Overall, the goods-producing sector recorded growth of 4.4 per cent relative to the corresponding period last year, contributing one per cent of GDP growth; while the services industry grew by 0.6 per cent and contributed 0.5 per cent of GDP growth.
Due to an “increase in credit to the private sector for non-consumption purposes”, the finance and insurance sector experienced an increase of 0.4 per cent; deposit-taking institutions benefiting from net interest income, fees and commission, and income on other financial assets.
For transport, storage and communication, which grew by 1.5 per cent, passenger movement (3.1 per cent) for higher volume of maritime cargo (7.9 per cent) were credited as major contributors to the improvement. But Bullock noted that, despite the growth experienced so far, we have “merely started on a journey, but [are] not at our destination”.
Projecting growth of up to 1.5 per cent for the October to December quarter, the director general said that growth could stem from “strategic projects” yet to be rolled out — the Automated System for Customs Data at the nation’s ports and the expansion of Kingston Wharves by Kingston Container Terminal being two such.
Asked if increase in employment by 16,800 was a reflection of the quality of the employment, Bullock replied that there were no data to indicate “if meaningful employment was gained”. Nevertheless, he said that any increase in employment was welcomed, and that employment prospects, particularly in the BPO sector at the entry level, can be improved upon.
There was a decrease in unemployment to 13.1 per cent, or 0.7 per cent lower than the July quarter, which witnessed in the following industries: real estate, hotel and restaurant, construction, wholesale and retail, and BPO — putting a “dent in youth unemployment”.
Bullock cited the improvement Doing Business Report as an indication of the country’s economic performance. In addition, he expects that the country will receive a good grade from the Internationa Monetary Fund (IMF), having exceeded targets for the 10th review now underway.
Responding to the question of the impact that reduced surplus targets would have on Jamaica, Bullock said that it would allow Jamaica to borrow funds not for consumption, but for growth-oriented projects.