Jamaica grew for eight consecutive quarters to pull itself out from under the coronavirus, but planners want a larger skilled workforce to guard against a return to low growth.
The economy grew 2.7 per cent in the March quarter 2023 compared to the same quarter in 2022. The growth was driven by a 3.8 per cent expansion of the services sector and a dip of 0.7 per cent in the goods-producing sector.
“A constraint currently facing Jamaica and its investors is that of an adequate supply of sufficiently skilled labour to capitalise on the opportunities which will arise. Increasingly, the question of whether Jamaica has reached its full employment level with respect to labour has come to the fore,” said Dr Wayne Henry, director general of the Planning Institute of Jamaica, PIOJ, at his quarterly press briefing on Tuesday.
The ministries of tourism, and labour and social security are separately conducting research on Jamaica’s labour market, with a focus on the availability of skills in growing areas. The results will inform future policy decisions with respect to training needs and mobilisation options.
The labour force hovered at July 2022, with the unemployment rate then estimated at 6.6 per cent, according to the latest data published by the Statistical Institute of Jamaica. Societies are generally seen as being at or close to full employment with 5.0 per cent of the labour force actively seeking jobs.
The latest labour force survey for April 2023 is expected to be published in August.
The onset of the pandemic in 2020 resulted in the firing and furloughing of labour. The workforce dipped to a low of 1.1 million in July 2020 or 10 per cent less than in 2019, according to Statin data. The workforce then rose in 2021 and 2022 as demand for construction and hospitality surged. Henry added that during this period some firms upskilled their workforce and/or added new equipment to increase productivity.
“In some instances, the economy has entered into this new growth phase stronger, more efficient and competitive due to the pivoting that firms were forced to undertake to combat the fall-out from the COVID-19 pandemic,” said the PIOJ head.
Overall, the Jamaican economy has surpassed pre-COVID-19 levels one year earlier than expected, thanks to stimulus measures implemented during the pandemic, said PIOJ.
Since the recovery, however, the pace of growth has slowed. For instance, the economy grew 4.3 per cent in fiscal year ending March 2023. But growth is projected to slow to a range of one to three per cent for this fiscal year. The performance of the mining and quarrying industry is expected to strongly impact the final growth numbers in the year, alongside the hospitality industry, transport and other services.
“A key development challenge which Jamaica now faces is how to capitalise on this growth momentum and realise sustainable economic growth rates above the 1.0 per cent long term trend,” said Henry.
He said that efforts are being made to attract significant investment to spur economic activities in areas such as outsourcing centres, tourism, logistics, digital animation and other IT-related services.
The outlook for the June quarter is for growth of two to three per cent, driven by the resumption of full operations at the Jamalco alumina plant, increased domestic demand, and the global economic recovery.
So far, for the month of April, the data show that airport arrivals are up 10.5 per cent year on year to some 238,500 persons; alumina production rocketed by 359 per cent and crude bauxite production by 17 per cent; and electricity consumption grew just over six per cent and water consumption by 1.6 per cent.