Economic Condition

Entertainment is a significant source of income for person in the “informal sector.”

The productivity of labour has declined during the past 20 months. The major factors are:

• Curfews
• Work from home mandates and
• Enterprises are operating with less flexibility.

As a result, the government announced that the mandatory “work from home” policy for public sector workers would be rescinded as of January 3, 2022.

The construction subsector is four (4) percent above the 2020 level.

As is usual, policy-makers continue to implement practices and procedures that are inimical to a large swath of the population:

• Dual-mode teaching.
• Digitization at a time when internet services are unreliable and/or unavailable for many, especially the dwellers in rural areas and the poor.
• People lack the resources to acquire the necessary equipment.
• The Bank of Jamaica has plans to implement “digital currency” to reduce the use of cash.

The economy contracted by 11.8 percent in 2020.

The government has announced that growth in the third quarter of 2021 was 5.8 percent.

The “official” rate of inflation is approximately seven (7) percent. Yet, that “official” rate is not what is being felt by individuals because the planning and monitoring agencies continue to use an outdated mix and weighting of good and services in the inflation basket.

Planning Institute of Jamaica Data – Third Quarter 2021 Compared to 2020.

• Services industry is estimated to have increased by 7.3 per cen.
• Goods producing industry by about 2.8 per cent.
• The ‘transport, storage and communication’ subsector grew an estimated nine per cent, mainly due to higher levels of activities.

• All service industry sub-industries grew, led by ‘hotels and restaurants’, which increased by an estimated 114.7 per cent.
  293. The out-turn for that subsector was spurred by a 293.3 per cent increase in stopover visitor arrivals for July and August.
  294. Visitor expenditure was estimated to have increased by 186.3 per cent to US$463.4 million for July and August.
• Four goods producing industry subsectors grew during the review period. These were led by ‘manufacturing’, up 8.5 per cent, with ‘agriculture, forestry and fishing’ recording 7.2 per cent, and ‘construction’, 1.7 per cent.
• Mining and quarrying’ declined by 31 per cent, due to a reduction in alumina and crude bauxite production.

Impact on the Real Estate Sector

During the economic contraction caused by COVID-19 in 2020 and early 2021, the vibrancy of the real estate/construction sector continued.

• The PIOJ reported a 1.7 percent increase in the construction sector during the third quarter of 2021. This growth, although small, is significant because construction was one of the few areas of the economy that grew in 2020.
• Rental rates have stabilized in the US$ high-end of the This stability may be short-lived as firms and foreign missions are expected to review and consolidate their operations and staffing needs.
• We have not yet seen the expected downturn in developments catering to the upper socio-economic group. The resurgence continues of new construction and extensive refurbishing in downtown Kingston. New commercial constructions and refurbishing continues in rural towns and in unexpected locations. For example, Drax Hall in St Ann is evolving into an “up-scale” commercial district because of the availability of land and a growing professional/upper-middle class residential base.
• We have seen reports of high-rise residential complexes that are planned for Ocho Rios and Discovery Bay. These may be viable for the ABnB sub-sector rather than occupancy by locals.
• Demand continues to outstrips supplies for residential units that cost less than $25M.
• The demand in the BPO sector continues for “move-in ready” These are extremely scarce because developers are building “shells” – walls, roof, windows and elevators. We have seen some market resistance to this trend due to the cost of the infrastructure that is required without the commensurate reduction of rental rates which remain in the US$16-18 per sq ft.
• Warehousing spaces for the distributive and retail trades will continue to be in
• The selling prices of units have remained stable and in some sub-sectors, prices have increased due to “cost-push” inflation.

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January 6, 2022