Real economy contracts 1.4% in Q1
Published:Friday | May 21, 2010 | 12:00 AM
The Planning Institute of Jamaica (PIOJ) said Thursday that three sectors of the economy grew in the first calendar quarter, but the performance of agriculture, tourism, and electricity and water were insufficient to grow GDP.
Economic activity contracted 1.4 per cent in the January to March period, relative to the 2009 period, largely due to a 5.7 per cent decline in the goods-producing industries.
The services segment was flat over the period.
"During the quarter, agriculture outperformed all other industries with growth of 2.5 per cent," said Dr Pauline Knight, acting director general of the PIOJ, in a review of real sector performance for goods.
Knight attributed the growth to success in protected agriculture techniques and successful irrigation measures to mitigate the effects of drought conditions, which started in the latter part of 2009.
The main growth areas in the sector were traditional export crops, which climbed 20.8 per cent; fishing was also up by 8.8 per cent; and animal farming had an uptick of 3.1 per cent. Domestic crop production declined, however, by 1.4 per cent, due largely to the effects of the drought.
Tourism on top
Tourism, a service industry, was the star performer - growing by six per cent, with total arrivals increasing by 0.9 per cent. Stopover arrivals grew by 8.6 per cent while cruise visitor arrivals declined by 11.1 per cent.
Knight said tourism growth was "due to the impact of efforts to attract visitors from non-traditional markets as well as a rebound from some traditional markets".
The electricity and water sector also grew by two per cent, though actual water production fell by 8.7 per cent, reflecting the impact of the drought.
The mining and quarrying sectors registered the largest decline - of 40.1 per cent - with alumina production down by 50.6 per cent, due to the closure of Alpart and Windalco plants. Crude bauxite production, however, went up by 35.9 per cent.
Manufacturing entities also shed value, with the sector declining by 2.3 per cent.
Knight said activity in the sub-sector 'beverages and tobacco' decreased as a result of reduced production of beer, which was done by 20.2 per cent; stout was down by 33.8 per cent and rum and alcohol by 26.5 per cent.
The fall-off in 'other manufacturing' was influenced by lower petroleum production as well as a decline in production of some industrial chemicals.
The construction industry also contracted three per cent, which was attributed to a decrease inactivities in road, hotel and residential construction.
The PIOJ is projecting for the second quarter near-flat performance of the economy, saying GDP is expected to grow marginally by zero to 0.1 per cent.
Knight, however, struck a positive tone.
"Global recovery is expected to have a positive impact on the out-turn in the Jamaican economy during 2010," said the PIOJ boss.
"Despite continued weak domestic and global demand, short-term prospects for the overall economy are, therefore, generally positive," she said, having pointed to the country's pact with the International Monetary Fund as a factor in its favour.