The Statistical Institute of Jamaica (STATIN) has emphasised that the headline indicator used to assess the performance of the Jamaican economy in its gross domestic product (GDP) report is the year-over-year growth rate — that is the reference quarter with the same quarter of the previous year.
STATIN made the point in a letter to the Jamaica Observer taking issue with the newspaper’s report from a STATIN release last Wednesday, which highlighted a slight decline of 0.1 per cent in GDP growth for the 2019 third quarter, when compared to the previous quarter.
“STATIN wishes to point out that the headline indicator used to assess the performance of the Jamaican econmy is the year-over-year growth rate, that is the reference quarter with the same quarter of the previous year,” STATIN Director General Carol Coy said in the letter.
“As stated in the institute’s press release dated December 30, 2019, ‘the Jamaican economy grew by 0.6 per cent for the third quarter of 2019 when compared to the similar quarter of 2018’,” the letter said.
“Although the comparative growth rate between two consecutive quarters is provided, this seasonally adjusted figure has historically not been used by STATIN as the official growth rate,” STATIN said.
The Jamaican economy grew by 0.6 per cent for the third quarter of 2019 when compared to the similar quarter of 2018. This increase was due to a 1.2 per cent growth in the services industries and a 1.0 per cent decline in the goods-producing industries.
According to STATIN, growth was achieved in all eight of the services industries — electricity and water supply increased by 0.8 per cent; wholesale and retail trade, repairs, installation of machinery and equipment by 0.6 per cent; hotels and restaurants by 2.5 per cent; transport, storage and communication by 1.2 per cent; finance and insurance services by 3.4 per cent; real estate, renting and business activities by 0.9 per cent; producers of government services by 0.4 per cent; and other services by 1.9 per cent.
The growth in the hotels and restaurants industry was due to increases in the group’s hotels and other short-stay accommodations and restaurants, bars and canteens. Hotels and other short-stay accommodation were positively impacted by a 4.9 per cent increase in foreign national arrivals.
The report also indicated that from July to September 2019, the 0.4 per cent fall in the goods-producing industries was caused by lower levels of output. Agriculture, forestry and fishing declined by 0.1 per cent, mining and quarrying by 17.6 per cent, and construction by 2.1 per cent.
The agriculture, forestry and fishing industry declined due to dry weather conditions across the island and increased production costs, while the performance of the mining and quarrying industry was largely due to the suspension of production in early September at the Jiuquan Iron and Steel Company (JISCO)/Alpart refinery. The planttemporarily closed down its production operations on September 27, which directly affected over 1,500 jobs and another 500 indirect jobs.
The construction industry was impacted by a fall in the civil engineering subgroup due to a reduction in road rehabilitation works.
The report noted, however, that manufacturing grew by 4.9 per cent due to growth in both the food, beverages, tobacco and other manufacturing sub-industries of 2.4 per cent and 8.8 per cent, respectively. The increase in the other manufacturing sub-industry was largely attributed to higher output of petroleum products.