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On positive note, Jamaica’s unemployment rate inches down to 3.6%

Durrant Pate/Contributor

Jamaica’s chief economic planning agency, the Planning Institute of Jamaica (PIOJ) has delivered a gloomy outlook for the economy in the current June quarter.

In delivering the outlook at the PIOJ’s Quarterly Media Briefing at its New Kingston Headquarters, Director General, Dr Wayne Henry declared, “For April–June 2026, prospects for the economy are generally negative. This is based on the expectation of lower output as industries continue to recover from the adverse effects of the hurricane. It is projected that the economy will contract within the range of 3.0% to 4.0% relative to April–June 2025.”

It is anticipated that GDP performance will be influenced by: 

1. Continued geopolitical tensions in the Middle East have resulted in higher energy and fertiliser prices. In addition to prices, the conflict has adversely affected investor and consumer sentiments that may impact overall demand for goods and services in the short term. 
2. Lower production, as industries are still within the recovery process, which may take up to three years. For Agriculture, while certain short-term crops have already rebounded, the overall recovery of the industry will not be fully realised in the short term, given the extended period required for other crop varieties to reach maturity. 

Preliminary data for the quarter indicate that Airport arrivals for April 2026 declined by 22.5% relative to April 2025. This outturn was in part due to the lingering effect of Hurricane Melissa. For the Mining & Quarrying industry, data for April indicate that the heavily weighted alumina production contracted by 27.3%, while crude bauxite production increased by 0.6%. 

Some positive news

However, on a positive note, the projection for Fiscal Year 2026/27 is for growth within the range of 1.0%– 3.0%. Most industries are forecast to record growth, as the recovery from the 10 weather-related shocks in 2025 will become more pronounced in the latter half of the fiscal year (October 2026-March 2027). 

Also regarding the employment outturn, STATIN has released an update on the Labour Force Survey for January 2026 showing a marginal improvement. For January 2026, the unemployment rate was 3.6%, down 0.1 percentage point relative to January 2025. Youth unemployment also decreased, down 1.6 percentage points to 10.7%.

At the same time, the unemployed labour force declined by 3 000 to 51 500 persons relative to January 2025. The number of persons employed dropped by 30,100 persons to 1,389,400 relative to January 2025.

Male employment fell by 15,300 to 747,700 persons, while female employment went down by 14,600 to 641,800 persons. 

The number of persons outside the Labour Force increased by 32,900 to 714,800 persons relative to January 2025

Upside Potential and Downside Risks 

There is upside potential and downside risks to the PIOJ’s forecast. The upside potential to growth includes early resolution to the ongoing conflict in the Middle East and favourable weather conditions, supporting the continued strengthening in agricultural output and water production. 

The downside risks to these projections include:

1. Unplanned factory downtime associated with aged production plants, particularly in the Mining & Quarrying and Manufacturing industries;
2. Weather-related shocks, largely associated with the start of the hurricane season; and
3. Lower than anticipated external demand for Jamaican goods and services as a result of slower than expected growth in the economies of Jamaica’s main trading partners (particularly the USA).