Economy contracts 5.9 per cent in March 2026 quarter

The Planning Institute of Jamaica (PIOJ) is reporting that the economy contracted by an estimated 5.9 per cent during the January to March 2026 quarter, compared with the corresponding period in 2025.

Speaking during PIOJ’s quarterly briefing on Wednesday, Director General, Dr Wayne Henry, said the out-turn largely reflected the lingering impact of Hurricane Melissa on productive activities.

“The impact of the hurricane led to an estimated contraction in all industries, with the exception of financial and insurance activities and public administration and defence, as well as a reduction in the employed labour force and lower levels of business and consumer confidence, which constrained domestic demand,” he said.

Henry explained that the hurricane’s impact was compounded by weakened external demand, driven by intensifying geopolitical tensions in the Middle East.

He noted that the resulting supply chain disruptions and surging energy prices curtailed trade flows and dampened global demand.

During the review period, the Goods Producing Industry contracted by an estimated 11.2 per cent, reflecting declines across all four subsectors. Output in Agriculture, Forestry, and Fishing was estimated to have fallen by 20.3 per cent.

“This performance stemmed from the devastation caused by Hurricane Melissa in the previous quarter, which caused damage and losses to crops, livestock, aquaculture, infrastructure and equipment, valued at an estimated $43.9 billion,” Henry said.

The Mining and Quarrying industry contracted by an estimated 26.6 per cent, reflecting reduced output of both crude bauxite and alumina.

Meanwhile, the Manufacturing industry was estimated to have declined by 7.7 per cent, due to lower production in the Food, Beverages and Tobacco subsector, as well as in other manufacturing activities.

Real value added for Construction declined by 1.3 per cent, reflecting downturns in both the Building Construction and Other Construction components.

“The industry’s performance was adversely affected by delays in some ongoing infrastructure projects due to the shock caused by Hurricane Melissa. However, rebuilding initiatives by households and State agencies tempered the rate of decline,” the Director General explained.

Henry noted that the Services Industry was estimated to have declined by 4.1 per cent, with contractions recorded in all but two subsectors.

Real value added for the Financial and Insurance Activities subsector and the Public Administration and Defence subsector increased by an estimated 1.8 per cent and 1.9 per cent, respectively.

“This performance was mainly due to higher net interest income, as well as increased fees and commission for commercial banks,” Henry said of the financial sector.

The Services subsector with the sharpest decline was Accommodation and Food Service Activities, which contracted by an estimated 20.4 per cent.

“This out-turn was attributed to a fall in visitor arrivals, largely associated with the lingering effects of Hurricane Melissa. Total visitor arrivals decreased by 17 per cent to 1,017,443 visitors, with stopover arrivals down 27.5 per cent to 534,652, and cruise passenger arrivals down 1.1 per cent to 482,791,” Henry said.

Henry added that the sharp downturn in visitor arrivals outweighed the positive impact of an increase in the average length of stay to 8.6 nights, up from 8.1 nights.

He explained that this led to a 21.3 per cent decline in visitor expenditure, which fell to US$976.4 million.

-JIS News

Follow The Gleaner on X and Instagram @JamaicaGleaner and on Facebook @GleanerJamaica. Send us a message on WhatsApp at 1-876-499-0169 or email us at onlinefeedback@gleanerjm.com or editors@gleanerjm.com.