JM | Nov 19, 2020

PIOJ: Construction, agriculture grew as economy contracted by 11.3% in July-September quarter

/ Our Today

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Wayne Henry, director general of the Planning Institute of Jamaica.

The Planning Institute of Jamaica (PIOJ) is reporting growth in construction and agriculture, forestry and fishing during the July to September 2020 quarter.

PIOJ Director General Dr. Wayne Henry said construction increased by an estimated five per cent, while agriculture grew by approximately two per cent.

He said the growth of the subsectors is despite a 3.6 per cent contraction of the goods-producing industry.

Overall, the economy contracted by 11.3 per cent during the quarter, compared to the corresponding period in 2019.

Henry, who was addressing the PIOJ’s quarterly media briefing on Wednesday (November 18), said the upturn in construction was mainly spurred by improvement in the ‘other construction’ component, resulting from increased capital expenditure on civil engineering activities.

These included $5.3 billion disbursed by the National Works Agency (NWA), relative to $2.7 billion in 2019; and $1.4 billion disbursed by National Road Operating and Constructing Company Limited (NROCC).

As it relates to agriculture, Henry said the growth was mainly due to favourable weather conditions, as well as government initiatives to improve the industry’s output.

Workmen lay asphalt at a section of the Lagoon View Walk roadway in St. James. Funds disbursed by the National Works Agency for construction projects are among those credit with growing the sector during the period under review.

Among these are the Productivity Incentive Programme, which provided farmers with seedlings and fertiliser; and the Agriculture Excess Buy-Back Programme, which facilitated an outlet for farmers’ produce due to oversupply from reduced demand consequent on the coronavirus (COVID-19) pandemic.

As it relates to out-turns for the other two subsectors under the goods-producing industry, Henry said mining and quarrying declined by an estimated 22.9 per cent and manufacturing was down by 8.7 per cent.

Turning to services, the PIOJ head reported that the industry contracted by approximately 13 per cent, with activities in all subsectors declining.

These include hotels and restaurants, down 63.8 per cent; transport, storage and communication, down 17.4 per cent; wholesale and retail trade, repair and installation of machinery, down 7.5 per cent; electricity and water supply, down 6.9 per cent; and finance and insurance services, down 4.5 per cent.

“All industries recorded contraction, with the exception of agriculture, forestry and fishing, up 0.3 per cent, and producers of government services, up 0.2 per cent.”

Dr WAyne Henry, director general of the Planning Institute of Jamaica

Henry noted that the out-turn for hotels and restaurants reflected an 81.8 per cent downturn in stopover arrivals, particularly from Jamaica’s main source markets, the United States (US), Europe and Canada.

Arrivals from the US fell by 78.3 per cent to 97,667 persons; arrivals from Europe were down by 91.2 per cent to 6,924 persons; while arrivals from Canada declined by 88.2 per cent to 7,928 persons.

Additionally, he said visitor expenditure decreased by an estimated 74.7 per cent to US$215.7 million.

Henry said the economy contracted by an estimated 10.7 per cent for the first nine months of the calendar year, from January to September, reflecting a six per cent fall in the goods-producing industry and 11.4 per cent decline in the services industry.

“All industries recorded contraction, with the exception of agriculture, forestry and fishing, up 0.3 per cent, and producers of government services, up 0.2 per cent. The downturn for the… period was led by hotels and restaurants, down 53.3 per cent,” he informed.

Henry said that the economy is projected to contract within the range of nine to 11 per cent for the October to December quarter, resulting in a 10 to 12 per cent decline in both the 2020 calendar and 2020/21 fiscal year out-turns.

This, he said, is due to COVID-19 and the curtailment measures, the effects of heavy rainfall across the island, among other factors.



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