geisha.kowlessar@guardian.co.tt
During the first three quarters of 2021, labour productivity in the non-energy sector improved by 36.7 per cent, reflecting higher production levels alongside fewer man-hours worked, according to the Central Bank’s recently released Annual Economic Survey 2021.
It noted that domestic production in the non-energy sector, as measured by the Index of Domestic Production, increased by 35.0 per cent during the first three quarters of 2021, while the Index of Hours Worked fell by 1.2 per cent.
According to the survey, the largest increases in domestic production occurred in the assembly type and related products (103.4 per cent), drink and tobacco (52.0 per cent), and food processing (28.3 per cent) industries.
More specifically, it added, these increases were propelled by greater production for metal furniture, alcoholic beverages, grain and feed mills, and processed fruit and vegetables.
The survey also noted that these increases however, were tempered by lower production in the printing and publishing (-11.1 per cent) and textile and garments (-2.1 per cent) industries.
Conversely, it cited, productivity in the energy sector declined, driven mainly by a drop in domestic production in both the upstream and downstream industries.
During the first nine months of 2021, the Index of Domestic Production pointed to declines of 5.2 per cent, 24.7 per cent, and 7.1 per cent in the petrochemicals, natural gas refining, and exploration and production of oil and natural gas industries respectively, the survey said.
Meanwhile, it noted that man-hours worked in the petrochemicals, and exploration and production of oil and natural gas industries fell by 6.5 per cent and 4.5 per cent, respectively.
Regarding sectoral wages, the survey said wage growth moderated in 2021.
It said collective agreements registered with the Industrial Court showed that the increase in the median wage measured 2.0 per cent in 2021, down from 2.8 per cent in 2020 and 3.0 per cent recorded in each of the previous three years (2017 to 2019).
The survey also noted that wage increases for 2021 ranged between 1.0 and 4.0 percent compared with a range of 1.0 and 6.0 per cent in 2020.
The finance and insurance sector, it added, received the highest average wage increase of 2.75 per cent, while wages within the wholesale and retail trade sector registered the smallest average increase of 1.5 per cent.
Regarding liquidity, the survey said liquidity levels in the domestic banking system declined during 2021 from the significant spike of the previous year.
It noted that commercial banks’ holdings of excess reserves decreased to a monthly average of $8,116.9 million from $9,353.3 million in 2020.
Central Government’s fiscal activity – typically the main driver of liquidity – resulted in a net withdrawal of $1,136.4 million from the financial system, a reversal from the net injection of $10,933.9 million in 2020, the survey also noted.
Additionally, the survey noted that the pandemic’s adverse impact on labour intensive businesses and households’ earning capacity, along with the reintroduction of public health regulations in 2021, reduced consumers’ desire and the ability to take on debt.
It said on a year-on-year basis, consumer lending declined by 2.4 per cent in December 2021 compared to a falloff of 2.3 per cent one year earlier.
According to the survey data to December 2021, detailing consumer loans by purpose, pointed to a falloff in major loan categories, in particular, lending for the purchase of motor vehicles – which accounted for 23.1 per cent of total loans valued at $4.7 billion – narrowed by 9.7 per cent.
Also, the survey noted that tighter credit card limits implemented by some commercial banks continued to depress credit card loans.
It said on a year-on-year basis, credit card loans narrowed by 7.6 per cent in December 2021 compared to a falloff of 2.5 per cent one year earlier.
On the other hand, lending for refinancing which gives the option for the consumer to access additional funding- and lending for the purchase of land and real estate expanded by 17.8 per cent and 1.5 per cent, respectively, the survey added.
Further, it said real estate mortgage lending accelerated slightly but generally remained moderate in 2021.
On a year-on-year basis, real estate mortgage lending expanded by 3.8 per cent in
December 2021 compared to 4.2 per cent one year earlier, the survey said while residential real estate mortgage loans rose by 3.0 per cent in December 2021, slipping from 4.2 per cent one year prior.
