More jobs, growth in first quarter - PIOJ
Published:Sunday | May 22, 2011 | 12:00 AM
Sabrina Gordon, Business Reporter
After 13 quarters or more than three years of consecutive contraction in the Jamaican economy, the Planning Institute of Jamaica (PIOJ) has confirmed GDP growth of 1.5 per cent for the period January to March, officially signalling the end of the recesssionary period.
PIOJ Director General Gladstone Hutchinson also announced the addition of 15,500 jobs over the November 2010-January 2011 period.
The unemployment rate at the end of January was 12.9 per cent.
"The positive growth performance confirms the track of our projections from the previous quarter and we are anticipating that this growth trajectory will continue throughout the remainder of the year, barring any unforeseen circumstances," said Hutchinson on Friday in his quarterly economic briefing.
The growth figure is slightly at variance with those reported by Prime Minister Bruce Golding in his contribution to the budget debate on May 10, when he said the economy had grown by one per cent for the quarter ending March 2011, as well as the estimated figure stated by Bank of Jamaica Governor Brian Wynter on May 19.
"Our reported rate this morning represents a noted improvement in the preliminary rate given to the prime minister and reflects our updated information on the performance of the real sector," said Hutchinson.
"Overall, the positive GDP performance is underpinned by the gradual recovery by most industries following the adverse impact of the global recession on these industries, increased production and replanting activity in agriculture following the impact of Tropical Storm Nicole (in September 2010) and the positive impact of higher employment levels on domestic aggregate demand."
No growth has been recorded in the Jamaican economy since the quarter ended September 2007.
The final arbiter of economic performance, however, is Statin, whose GDP numbers typically lag the central bank and planning agency.
The recession will be officially considered broken if Statin's numbers comport with the positive GDP already reported.
This March quarter expansion, Hutchinson said, comes as a noted break from the negative GDP which resulted not only from the impact of the deep global recession but also from structural weakness and areas of uncompetitiveness in the local economy.
"Overall, the PIOJ is very optimistic that the growth momentum in the domestic economy will solidify and, barring any major shocks the economy will experience, we will see increased dynamism and growth for the remainder of 2011," the PIOJ head.
The optimism, he noted, "is hinged on the grand implementation of public expenditure prioritisation and the supply side initiatives that were spelled out in the growth inducement strategy", launched by the PIOJ on March 15.
For the April-June quarter, the PIOJ projects 1-2 per cent.
Sectors that accounted for growth for the last quarter include the goods producing sector which increased by 5.9 per cent, but the services sector remained flat.
Within the goods producing industry, all categories grew except for construction and installation, which fell by 0.5 per cent, according to Hutchinson.
Agriculture, forestry and fishing grew by 13.5 per cent with the main growth areas being 'other agricultural crops', which improved by 22.2 per cent, and post harvest activities which went up by 59.2 per cent. Fishing saw an 8.1 per cent increase.
Traditional export crops and animal farming declined by 0.2 per cent and 4.7 per cent, respectively.
With higher production and the reopening of the Windalco Ewarton plant in St Catherine in June last year, the mining & quarrying sector grew by 38.8 per cent.
Bauxite production was up 36.4 per cent, alumina production increased by 44.3 per cent, while crude bauxite increased by 29.2 per cent.
The manufacturing industry grew modestly by 0.4 per cent.
Hutchinson said hotels and restaurants showed the most improvement in the services sector, growing by an estimated 3.7 per cent. The electricity and water industry grew by 0.5 per cent with water production rising by 10.7 per cent, reflecting more favourable weather conditions.
Although there was an increase in fees and commission income recorded by financial institutions during the quarter, it was not enough to combat the decline in the stock of loans and advances at commercial banks, resulting in a flat performance in the real value for the finance and insurance services sector.
Other categories within the services sector all experienced decline. Among them are transport, storage and communication, which dipped by 0.8 per cent and the wholesale and retail trade which fell by 0.5 per cent.