The COVID-19 pandemic continues to dampen production of goods and services, the Central Bank has stated in its Monetary Policy Report for November 2021.
“Early estimates point to a contraction of production in the second quarter of 2021 in both energy and non-energy sectors,” it stated.
According to the Central Bank’s Quarterly Index of Real Economic Activity(QIEA, 2012=100), domestic production was 7.2 per cent lower in the second quarter of 2021 compared to the year-earlier period.
“Activity in the energy sector decreased 9.4 per cent, while output in the non-energy sector fell by 5.7 per cent,” it stated.
The Central Bank stated that reduced natural gas supply continued to plague the energy sector in the second quarter of 2021.
“The Central Bank’s QIEA suggests that activity in the Mining and Quarrying sector recorded a decline of 8.3 per cent (year-on-year). Natural gas production fell by 22.1 per cent, which overshadowed the 6.5 per cent year-on-year increase in crude oil production during the three-month period,” it stated.
The upstream gas supply constraint affected the Refining sub-sector, where activity fell by 39.9 per cent due to a 44.1 per cent falloff in liquefied natural gas (LNG) production, on account of the continued closure of Atlantic Train I during the period.
Meanwhile, downtime at the Nutrien complex and the TRINGEN I ammonia facility contributed to an 8.2 per cent drop in ammonia output. However, methanol production grew notably by 29.5 per cent, reflecting better production rates in 2021 following temporary market-related closures stemming from COVID-19 and its effect on markets in 2020.
“Methanol production was buffered by the addition of output from the Caribbean Gas Chemical Limited facility, which began commercial operations in December 2020. The uptick in methanol production boosted overall Petrochemicals sector activity (7.7 per cent) in the second quarter of 2021,” it stated.
The Central bank stated that available indicators show that output in several nonenergy sectors was weighed down by public health restrictions to mitigate the spread of the COVID-19 virus.
“While some sectors showed signs of improvement, large contractions in construction, retail trade, and manufacturing kept overall non-energy activity low. Construction activity was restricted in May and June 2021, leading to a 41.4 per cent decline in construction indicators in the second quarter of 2021.
Activity in the Wholesale and Retail Trade (excluding Energy) sub-sector is estimated to have declined 16.6 per cent over the period given the subdued economic landscape.
Manufacturing (excluding Refining and Petrochemicals) was subdued, registering an estimated decline of 1.5 per cent,” the Central Bank stated.