GEISHA KOW­LESSAR-ALON­ZO

geisha.kow­lessar@guardian.co.tt

Pre­lim­i­nary da­ta for the fourth quar­ter of 2021 from the Cen­tral Bank’s Quar­ter­ly In­dex of Eco­nom­ic Ac­tiv­i­ty sug­gest that en­er­gy sec­tor ac­tiv­i­ty ex­pe­ri­enced mod­er­ate im­prove­ments.

In its re­cent­ly re­leased An­nu­al Eco­nom­ic Sur­vey 2021 it not­ed that dur­ing the fourth quar­ter of 2021, growth was ob­served in crude oil pro­duc­tion (8.8 per cent), nat­ur­al gas pro­duc­tion (0.9 per cent), NGL pro­duc­tion (11.4 per cent), methanol pro­duc­tion (24.7 per cent) as well as am­mo­nia pro­duc­tion (2.4 per cent).

The sur­vey al­so not­ed that crude oil pro­duc­tion con­tin­ues to be buoyed by BHP’s Ru­by De­vel­op­ment which came on-stream in May 2021, while the im­prove­ment in nat­ur­al gas pro­duc­tion was due to the start-up of bpTT’s Mat­a­pal project in Sep­tem­ber 2021.

Ac­cord­ing to the sur­vey the sig­nif­i­cant gains not­ed in methanol pro­duc­tion were par­tial­ly due to a base ef­fect, as the At­las methanol fa­cil­i­ty un­der­went a six-week planned main­te­nance pro­gramme in the fourth quar­ter of 2020.

In ad­di­tion, it said, pro­duc­tion from the new Caribbean Gas Chem­i­cal Ltd (CG­CL) fa­cil­i­ty, which be­gan in De­cem­ber 2020, con­tin­ued to bol­ster methanol out­put in 2021.

Mean­while, the sur­vey cit­ed that both LNG and urea pro­duc­tion re­mained de­pressed dur­ing the three-month pe­ri­od, de­creas­ing by 5.1 per cent and 0.5 per cent, re­spec­tive­ly.

In the non-en­er­gy sec­tor, it added that pre­lim­i­nary in­di­ca­tors for the fourth quar­ter point to con­tin­ued re­cov­ery in some ar­eas, but ev­i­dence of a sus­tained re­cov­ery is not yet ap­par­ent.

Re­gard­ing un­em­ploy­ment, the sur­vey said the fall­out of the COVID-19 pan­dem­ic weak­ened the econ­o­my’s ca­pac­i­ty to ab­sorb labour in 2021.

It cit­ed that the un­em­ploy­ment rate in­creased to 5.7 per cent dur­ing 2020 from 4.3 per cent in 2019.

Ac­cord­ing to the sur­vey, the num­ber of peo­ple with jobs fell by “21.3 thou­sand per­sons in 2020 (the first year of the pan­dem­ic), with 7.9 thou­sand per­sons con­tin­u­ing to ac­tive­ly seek em­ploy­ment (un­em­ployed” per­sons).

“How­ev­er, 13.4 thou­sand per­sons left the labour force, con­tribut­ing to a labour force par­tic­i­pa­tion rate of 55.9 per cent in 2020 com­pared with 57.4 per cent in 2019.

The sur­vey al­so not­ed that sup­ple­men­tal da­ta sug­gest­ed that labour mar­ket con­di­tions re­mained rel­a­tive­ly weak in 2021.

Ac­cord­ing to re­trench­ment no­tices re­port­ed to the Min­istry of Labour, 1,310 peo­ple were re­trenched dur­ing 2021, com­pared to 2,775 per­sons dur­ing 2020, it cit­ed.

“Al­though this sig­nals an im­prove­ment, it should be not­ed that re­port­ed re­trench­ments do not in­clude job loss­es due to busi­ness clo­sures,” the sur­vey said.

Fur­ther, it said that dur­ing 2021 the re­tail sec­tor was hit par­tic­u­lar­ly hard due to ex­tend­ed lock­downs, lay­offs, and re­duced ag­gre­gate in­come among con­sumers.

Most of the re­port­ed re­trench­ments dur­ing 2021 oc­curred in the dis­tri­b­u­tion, restau­rants and ho­tels (420 peo­ple), en­er­gy (308 peo­ple), trans­port, stor­age and com­mu­ni­ca­tion (239 peo­ple) and man­u­fac­tur­ing (235 peo­ple) in­dus­tries, the sur­vey added.

In look­ing at the oth­er ar­eas the sur­vey said gen­er­al Gov­ern­ment debt in­creased dur­ing FY2020/21 (Oc­to­ber 2020 –Sep­tem­ber 2021), pri­mar­i­ly due to Cen­tral Gov­ern­ment bor­row­ing on the do­mes­tic mar­ket for bud­get sup­port.

At the end of Sep­tem­ber 2021, ad­just­ed gen­er­al Gov­ern­ment debt out­stand­ing (which ex­cludes debt is­sued for ster­il­i­sa­tion pur­pos­es) stood at $126.6 bil­lion (84.8 per cent of GDP), com­pared to $118.4 bil­lion (79.6 per cent of GDP) at the end of Sep­tem­ber 2020, the sur­vey said.

Re­gard­ing liq­uid­i­ty, it not­ed that liq­uid­i­ty lev­els in the do­mes­tic bank­ing sys­tem de­clined dur­ing 2021 from the sig­nif­i­cant spike of the pre­vi­ous year.

Com­mer­cial banks’ hold­ings of ex­cess re­serves de­creased to a month­ly av­er­age of $8,116.9 mil­lion from $9,353.3 mil­lion in 2020, ac­cord­ing to the sur­vey.

It al­so not­ed that 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.

And re­gard­ing build­ing ma­te­r­i­al prices, the sur­vey said de­spite slug­gish ac­tiv­i­ty in the lo­cal con­struc­tion sec­tor, build­ing ma­te­r­i­al prices surged in 2021.

It at­trib­uted this to high­er freight prices and glob­al short­ages for raw ma­te­ri­als (par­tic­u­lar­ly, steel and lum­ber) which drove much of the in­creas­es dur­ing the year.

The In­dex of Re­tail Prices of Build­ing Ma­te­ri­als in­creased by 10.7 per cent in 2021 com­pared to 2.6 per cent in 2020, the sur­vey said, adding that all sub-cat­e­gories with­in the In­dex in­creased dur­ing 2021.

No­table in­creas­es were record­ed in walls and roof (14.0 per cent), plumb­ing and plumb­ing fix­tures (12.2 per cent), fin­ish­ing, join­ery units and paint­ing and ex­ter­nal works (8.7 per cent), and elec­tri­cal in­stal­la­tion and fix­tures (8.7 per cent) sub-in­dices, ac­cord­ing to the sur­vey.