PORT OF SPAIN, Trinidad, CMC -The Central Bank of Trinidad and Tobago (CBTT) says Indicators suggest a contraction in energy production in the second quarter of 2024, alongside buoyant nonenergy output.
In its November Monetary Policy Report, the CBTT said energy sector output incurred significant declines due to shortfalls in upstream production. Meanwhile, activity in the nonenergy sector remained resilient, and inflation was contained.
It said while economic activity improved in the first quarter of 2024, there were ongoing production challenges in the energy sector.
Data from the Central Statistics Office (CSO) indicates that the gross domestic product (GDP) at constant prices (real GDP) improved by 1.5 percent in the first quarter of 2024.
Growth was premised on the continued strength of the nonenergy sector, 1.8 percent, which was 1.8 percent, and further supported by a marginal expansion in the energy sector, 0.9 percent percent.
NonenergyUpticks inufacturing, excluding refining and petrochemicals, financial and insurance activities, and transport and storage sectors.
, propelled nonenergy sector output. The CBBT said that growth in the energy sector emanated from improvements in the manufacture of petrochemicals, condensate extraction, and petroleum and natural gas distribution sectors. It added that these were partially offset by declines in the crude oil exploration and extraction, natural gas exploration and extraction, asphalt, and refining sectors.
The Central Bank estimates suggest that the energy sector contracted in the second quarter of 2024. However, nonenergy sector activity remained strong over the period, registering 1.7 percent, though it was insufficient to counter the declines in the energy sector, which was 7.9 percent.
The CBTT said that waning energy sector output was premised on shortfalls in upstream production.
Data from the Ministry of Energy and Energy Industries (MEEI) pointed to reduced output of crude oil (-11.4 percent) and natural gas (-9.8 percent) in the second quarter of 2024. This primarily reflected the planned maintenance programs conducted by bpTT at several production facilities
This prompted a falloff in mining and quarrying sector activity (-8.2 percent). The CBB said these upstream declines filtered through to the refining and petrochemicals sectors.
“In the case of the former, reduced production of liquefied natural gas (LNG) (-16.7 percent) outweighed a sizable uptick in natural gas liquids (NGL) production (41.6 percent). The significant increase in NGL production was due to a base effect, as Pheonix Park Gas Processors Limited took its processing units offline in April 2023 for routine maintenance works. “
Meanwhile, petrochemical production was marred by declines in ammonia (-9.8 percent) and methanol (-6.8 percent) output. Over the period, urea production improved marginally (1.0 percent).
The CBBT said preliminary data for energy sector output from July to August 2024 suggest a partial improvement from the second quarter’s performance.
According to data from MEEI, crude oil production declined by 3.1 percent, while natural gas output increased by 2.8 percent over the period. The production of liquefied natural gas (LNG) fell by 2.5 percent, while natural gas liquids (NGL) grew by 12.8 percent. In the downstream sector, improved output was observed for ammonia (18.7 percent) and methanol (3.0 percent), while the production of urea declined by 72.9 percent.
The CBBT said that indicators suggest that the nonenergy sector remained resilient in the second quarter of 2024.
“This sentiment was supported by an increase of 10.1 percent (year-on-year) in the Cashless Payments Index in June 2024, a supplementary indicator of activity in the nonenergy sector. On a sectoral basis, increased activity was estimated in the Wholesale and Retail Trade (excluding Energy) sector (2.7 percent), reflecting an improvement in the Retail Sales Index.
“This reflected improvements in most sub-indices, specifically Dry Good Stores (3.6 percent) and Supermarkets and Groceries (1.3 percent). Improvements in the Index were offset by decreased sales in the Household Appliances, Furniture, and Other Furnishings (-1.1 percent) and Textiles and Wearing Apparel (-0.3 percent) sub-indices.
“The buoyancy of this sector was further supported by upticks in supplementary indicators, depicted by an increase in the volume of point of sale (18.0 percent) and internet merchant (14.8 percent) transactions.”
The CBTT estimated increased activity (6.5 percent) in the transportation and storage sector due to greater land and air travel. It said an uptick in the local sales of cement suggests improved activity in the construction sector (3.7 percent).
Over the period, improvements were also noted in the number of building permits issued and refused (26.2 percent), hinting at heightened construction-related activity in the near term. Improvements were also estimated in the manufacturing sector, excluding the refining and petrochemicals sector (0.2 percent).
Conversely, declines were estimated in several sectors in the second quarter of 2024. Notable among these was the electricity and water sector, excluding (-0.7 percent), wherein improved power generation was offset by reduced water supply.
Further, indicators point to curtailed activity in the financial and insurance activities sector (-1.3 percent). The CBTT noted a falloff in gross premiums in the insurance industry, a reduction in the volume of shares traded on the stock exchange, and a decline in deposits and investments of trust institutions.
The Central Bank said labor market conditions tightened somewhat in the second quarter of 2024, resulting in an unemployment rate of 4.8 percent compared to 3.7 percent recorded in the same quarter of 2023.
It said the higher unemployment rate reflected a year-on-year decline in the number of employed people (26.7 thousand) and an increase in the number of unemployed people (5.9 thousand).
“Simultaneously, the labor force contracted by 20.8 thousand persons, resulting in a labor force participation rate of 54.5 percent, down from 56.2 percent in the corresponding quarter one year earlier. National insurance scheme (NIS) payments also declined by 5.6 percent (year-on-year) in the second quarter of 2024, suggesting generally weaker employment during the period.”
Meanwhile, preliminary data show that the number of job advertisements published in the print media (608) increased by 16.3 percent (year-on-year) during the third quarter of 2024.
The CBTT said total imports rose by US$107.7 million to US$1,774.3 million in the second quarter of 2024.
Over the three months to June 2024, fuel imports increased by 36.5 percent (year-on-year), or US$111.0 million, to reach US$414.9 million.
“This movement was primarily driven by an increase in import volumes of refined products for export to regional markets, which more than doubled (152.4 percent) over the reference period. Concurrently, non-fuel imports recorded a marginal decline, falling by 0.2 percent or US$ 3.3 million to US$1,359.4 million.”
The CBTT said total exports posted a marginal decline in the second quarter of 2024.
It said exports registered US$2,334.6 million in the second quarter of 2024 compared to US$2,494.2 million in 2023.
“The lower outturn in total exports was driven mainly by a reduction in energy exports. Specifically, energy exports fell 7.4 percent (year-on-year) to US$ 1,867.7 million in the second quarter of 2024.
“Declines were noted for most subcategories of energy exports, including gas (-34.9 percent) and petrochemicals (-2.2 percent). Softer international commodity prices and lower export volumes for some products during the period were responsible for the weaker performance.
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