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Introduction
The manufacturing industry is estimated to have declined by 1.2 per cent in
real value added during 2008. The main component
of the industry are the Food, Beverages and Tobacco"and "Other
manufacturing" category and the
industry faced challenging times due to the global and financial economic
crisis. This resulted in an intensification of supply-side constraints and
was further compounded by the decrease in demand for local manufactured
goods in the domestic and international markets. The supply-side constraints
intensified as a result of
tightening of credit markets and limited funds available to local
manufacturers.
Inclement weather such as the passage of
Hurricane Gustav and continuous rain in October and November also had an impact
on the industry. This resulted in lower production for local manufacturers and impacted activities in the sugar cane
industry. On the other hand, the total labour force for the Manufacturing
industry grew by 3.5 per cent 80,100 persons compared to 77,375 persons in 2007.
The number of persons employed to the Manufacturing sector also increase moving
by 1.5 per cent to 71,150 persons.
Policies and Programmes
The Manufacturing Industry operated within the framework established by the
Ministry of Industry, Commerce and Investment. The Ministry encouraged
investment and placed emphasis on increasing producitivity so as to develop global competitiveness and international commerce
through the application of cutting edge technology.
Investment
During 2008, total capital investment was J$4.56 billion,72.0 per cent more
than 2007. The majority of these investments were from the
Petrochemicals, Plastics and Agro-processing sub sectors, with petrochemicals
registering the highest investment. The development of an ethanol dehydration
facility at Port Esquivel was the largest expansion under the
petrochemical sub sector. In addition, there was expansion in the cement sub
sector through the modernization and upgrading of the Caribbean Cement Company
clinker.
Performance
Higher output was recorded in the "Food, Beverages and Tobacco" and
"Chemicals and Chemical Products" sub categories. The Producer Price Index
(PPI) for the manufacturing sector showed an increase of 14.1 per cent. This
increase was as a
result of a 19.8 per cent increase in the index for " food, beverages and tobacco".
Chemicals and chemical products recorded an increase of 23.1 per
cent. A
24.8 per cent decline was seen in the sub index for Refined Petroleum Products
which was due mainly to a decline in international crude oil prices.
Food Processing
During 2008 gross output in the in the food processing sub sector
decreased as a result of declines in dairy products, cornmeal, condensed milk,
edible oils, sugar and molasses. Sugar production was 13.8 per cent
lower than 2007 while molasses production declined by 19.9 per cent. This reduction was due mainly to
inclement weather in the latter part of 2007 which had a negative impact on the 2008
sugar crop. During the year, the production of animal feeds increased by 3.7 per
cent. This was consistent with higher production in poultry meat.
Beverages and Tobacco
The Beverages and Tobacco sub sector recorded an increase in output as a
result of increased production in alcohol, beer and carbonated beverage. The increase in alcohol production for 2008 transpired against an
unfavourable production environment in the previous year, which was brought about by
the negative impact of Hurricane Dean.
Other Manufacturing
The Non-Metalic Minerals and Plastic Products sub sector was
negatively influenced by a decline in cement production which was attributed to
the slowing down of construction activities. Another negative factor was a 65.1 per cent decline in the production
of boots and a 13.9 per cent decrease in the production of other plastic
products.
Higher levels of output was seen in the Petroleum Products group due to
increased production in liquid petroleum gas (55.6 per cent), turbo fuel (30.1 per cent), fuel oil (6.8 per cent) and
gasoline (3.6 per cent). There was a decline however in automotive diesel and other
petroleum products.
Chemical and Chemical Products continued on a downward trend with
major declines in fertilizer and sulphuric acid of 39.5 per cent and 12.8 per
cent respectively. The decline in fertilizer was due mainly to the
negative impact of Tropical Storm Gustav on production and the availability of
cheaper imported alternatives which resulted in a fall off in demand. There was a decline in the production of sulphuric acid due to
the closure of the production plant for refurbishing. A decline was also
seen in paint production and this was attributed to lower demand for the product
as a result of the downturn in construction activities.
Manufactured Export Earnings
In 2008, total maufactured exports recorded an increase of 37.5 per
cent which amounted to US$1 244.7 million. This was as a result of
increased earnings from Non-Traditional Manufacture Exports which increased by US$1 094.7 million in
2008 or 45.2 per cent more than
the previous year. This positive growth was due mainly to revenue from export of
ethanol and mineral fuels. Total Traditional
Export goods declined by 1.0 per cent with major declines in other products
(62.7
per cent) and rum (4.5 per cent). Exports of crude materials as well as
animal and vegetable oils recorded the highest declines.
Apparel Industry
The apparel sub-sector's export earnings continued to trend downwards with a
decline of 46.4 per cent to US$22.4 million or US$9.8 million less than 2007. The
revised figure for total apparel exports under the Caribbean Basin Trade
Partnership Act (CBTPA) was valued at US$37.2 million while total exports under
the CBTPA for 2008 decline by 47.8 per cent to US$19.4 million. In 2008, the
category "Others" also recorded a decline of 30.0 per cent to US$2.8
million or US$1.2 million less than the previous year.
Source: Economic and Social Survey Jamaica updated October
2008
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