Nine Months to Maturity

Patrick Bataille, Chief Executive Officer, Mayberry Investments Limited · Tuesday, 18 August 2026

The most important sentence in the Planning Institute’s briefing this morning was not a forecast. It was an agronomic fact, sitting in the small type beneath the agriculture numbers: export crops typically require nine months to a year after replanting to reach maturity.

Melissa came ashore in late October. Count forward. The banana sucker put into the ground in the first weeks after the storm is only now — this month, perhaps next — becoming a plant that bears. The cocoa is further out still. Which means the 64.0% collapse in traditional export crops recorded for the June quarter was not a measure of effort, or of policy, or of confidence. It was a measure of the calendar.

I keep returning to that line because it is the honest frame for everything the PIOJ published. An economy recovering from a catastrophe is not one thing moving at one speed. It is a set of clocks, wound at different moments, running at different rates, and largely indifferent to the fiscal year we insist on measuring them against. The useful question this week is not whether Jamaica is recovering. It is which clocks are fast, which are slow, and which have stopped.

The headline, and what it conceals

Real value added fell 2.9% in April–June against the same quarter of 2025 — goods-producing down 6.4%, services down 1.7%. For the first half of the calendar year, the economy is 3.5% smaller than a year ago. Goods-producing industries, roughly a fifth of value added, delivered close to half the contraction.

But read the row rather than the cell. Goods-producing has printed -10.7%, then -7.3%, then -6.4%. Services: -5.9%, then -3.0%, then -1.7%. Every quarter since the storm has been less bad than the one before it. The Institute’s own quarter-over-quarter chart shows the sharp mechanical rebound from the December trough, with employment turning up alongside it.

There is a second point about the numbers themselves, and it deserves more attention than it will get. In May, the PIOJ reported the January–March quarter with goods-producing at -11.2% and services at -4.1%, for a headline contraction of 5.9%. Tuesday’s table carries the same quarter at -7.3% and -3.0% — implying a headline closer to 4%. That is not a rounding adjustment. It is a two-percentage-point revision, and it went in the direction of the hole being shallower than first measured. First estimates of a hurricane quarter are the least reliable figures a statistical agency produces. The same humility should attach to -2.9%.

The fast clocks

The rebuild is not a 2027 story. It is already in the accounts.

Cement output rose 56.8% in the quarter; clinker, 203.9%. Sales of construction inputs were up 13.7% in real terms and cement supply to the market grew 9.7%. On the public side, National Works Agency capital expenditure rose 405.9% to $4.4 billion, NROCC by 20.2% to $4.7 billion, and the UDC by 38.7% to $131 million. Construction has returned to growth at 0.3%; manufacturing at 1.0%; wholesale and retail trade at 0.2%, with hardware, building supplies and electrical goods up 12.7% and minerals, fuels and lubricants up 19.7%. Financial and insurance activities grew 1.9%, the PIOJ attributing it to higher net interest income on a rising stock of loans and advances.

Read together, that is a rebuilding economy being intermediated in real time. Reconstruction is a demand event well before it is a supply one, and the demand has arrived.

One number spoils the picture, and it is worth isolating: National Housing Trust housing starts fell 90.3%. Work-in-progress from the strong start figures of the previous four quarters will carry the building-construction component for a while. Starts are the leading indicator, and the pipeline has been emptied in a country that entered this shock with a housing shortage. That is a 2028 problem being manufactured in 2026.

The slow clocks

Agriculture contracted 17.0%. Plantains fell 77.5%, bananas 72.0%, cocoa 58.2%, yams 31.9%, fruits 30.3%. Eggs were down 26.6%.

Underneath that, though, the schedule is visible: vegetables rose 2.1%, potatoes 16.9%, cereals 15.0%. The short-cycle crops are already back. The tree and cane crops are not, and cannot be, for another year — because of the nine-month sentence, not because of anything anyone did or failed to do.

This matters beyond GDP, because in Jamaica the agriculture chart and the food component of the CPI are the same chart read upside down. At June, prices for fruits and nuts were 34.2% above a year earlier and the class covering tubers, plantains and cooking bananas was up 38%. Whatever food disinflation we eventually get will not be a monetary event. It will be a harvest.

The clock that has stopped

Mining and quarrying contracted 23.9%, against 23.5% in the March quarter. It is the only major industry that got worse. Alumina production fell 30.8% on technical problems traced to hurricane damage, with capacity utilisation at 28.3% — down 11.2 percentage points on the year. Crude bauxite rose 8.8%. Then the July data: alumina down 18.1%, crude bauxite down 55.7%.

This is not maturation. A crop heals on a schedule; a damaged refinery is a capital-expenditure decision and an engineering problem, and the PIOJ was explicit in naming unplanned downtime at ageing plants in mining and manufacturing as a live risk to the outlook. The distinction is not semantic. Agriculture and tourism have dates attached to them. Alumina has a decision attached to it, taken by someone whose planning horizon is not Jamaica’s fiscal year. They do not belong in the same forecast bucket, and I would not model them as though they did.

Tourism: improving series, deteriorating data

Accommodation and food service activities contracted 12.2%, an improvement on the 16.6% decline of the March quarter and a long way from December’s 31.0%. Progress, plainly.

The underlying data are less comfortable. Stopover arrivals for April–May totalled 382,745, down 19.6%; visitor expenditure fell 17.0% to US$578.0 million. And July airport arrivals fell 22.4% to 222,427 — a worse year-on-year outcome than the quarter that preceded it, in the middle of the summer season.

Transport and storage tells the same story from a different angle: down 3.9% overall, with air transport contracting while maritime expanded, domestic cargo volumes up 7.0% and Port of Kingston throughput up 11.0%. Goods are moving. People are not.

Tourism runs on a booking cycle that leads arrivals by months. The winter book — being made right now — is the number that will decide FY2026/27, and none of us can see it. I would be slow to underwrite a tourism recovery on the strength of a value-added series flattered by an easier base while the arrivals series is still going the wrong way.

The labour number that is not what it appears

Unemployment at April 2026 was 3.7%, against 3.3% a year earlier. On its face, a graze.

Look underneath. The employed labour force stood at 1,418,800 against 1,444,500 — 25,700 fewer people working. The labour force itself fell by 20,500, to 1,473,900. Participation dropped from 69.3% to 68.4%. Youth unemployment rose from 10.1% to 11.7%.

The rate held near record lows in part because the denominator shrank. Sequentially the story is better — employment is up roughly 29,400 from January’s 1,389,400 — which is precisely the shape of everything else in this briefing: bruising year-on-year, healing quarter-on-quarter. But a 3.7% unemployment rate should not be cited as evidence of resilience without the participation figure beside it.

Where the arithmetic strains

The PIOJ projects FY2026/27 growth of 1.0% to 3.0%. April–June came in at -2.9%. July–September is projected at -0.5% to -1.5%.

Do the arithmetic. To reach the bottom of that range, the two remaining quarters must average roughly 4%. To reach the top, roughly 8%. Jamaica has not delivered a pair of quarters like that outside a post-pandemic rebound.

The forecast is not wrong. It is simply a statement about the base rather than about momentum: October–December 2025 and January–March 2026 were the Melissa quarters, and lapping them mechanically produces large positive numbers regardless of what is happening on the ground. The honest test of a recovery is levels, not growth rates. Arrivals measured against 2025, not against a devastated quarter. Alumina tonnage measured against installed capacity, not against a broken one. Employment measured against 1,444,500. Those are the benchmarks I would hold the Institute — and ourselves — to over the next four prints.

What the Bank has to decide this week

The price backdrop has moved faster than almost anyone expected in May. Headline inflation ran 4.3% in April, 5.5% in May, 6.7% in June, and reached 7.5% point-to-point at the end of July. Core inflation, which the Bank watches for embedding, rose from 3.9% in January to 4.7% by May. The Monetary Policy Committee has held the policy rate at 5.50% throughout the climb, on the reasoning that an energy-driven overshoot is transitory and that the task is to prevent second-round effects rather than to fight the shock itself.

Here is the difficulty. The composition of the July print is no longer principally about Hormuz. Monthly inflation of 1.2% was led by transport, up 6.3%, which the PIOJ attributes to the second stage of increases in route taxi and hackney carriage fares. Administered fares rising in scheduled stages, months after the energy shock that justified the first stage, sits very close to the textbook definition of a second-round effect. That was the Bank’s own stated trigger.

Two things argue for patience. The first is the exchange rate: $158.51 per US dollar at end-June against $158.58 at end-March, a real appreciation of 1.4%, with the Bank still supplying the market — US$40 million through the B-FXITT window on 14 August. A firm currency is doing disinflationary work the policy rate is not being asked to do, and it is being bought with reserves and resolve rather than luck. The second is that the real economy is contracting, with a further decline forecast for the current quarter. Tightening into that is a hard vote to cast.

The decision is announced Wednesday, and it arrives in the middle of a leadership transition: Dr R. Brian Langrin takes office as Governor the same day, succeeding Richard Byles, with the accompanying quarterly briefing pushed back a week to allow him to settle. My counsel would be to spend less energy on the rate itself and more on the language — specifically, whether the Bank re-dates its expected return to the target band, and whether “second-round” begins to be used about fares rather than about oil.

The fiscal line worth reading twice

The quarter’s deficit was $23.8 billion, some $9.2 billion worse than budgeted. The composition is more instructive than the total: revenue came in $28.7 billion, or 9.8%, below programme, while expenditure came in $19.5 billion, or 6.3%, below programme.

This is a revenue-shortfall deficit, not a spending deficit. In a rebuilding year — with the fiscal rules suspended precisely to permit recovery expenditure — the state spent 6.3% less than it had planned to. The PIOJ names delays in executing major infrastructure projects among its downside risks to growth. Authorisation, in other words, is not the binding constraint. Execution is. Of all the clocks running in this economy, that is the one most amenable to being sped up by decisions taken in Kingston, and the one where the return on doing so is highest.

And so back to the field

For anyone allocating capital this week, the clock frame does most of the work.

The rebuild is not a forward-looking trade to be positioned for; it is in the June accounts already — cement and clinker, hardware and building-materials distribution, civil-engineering contractors, and the balance sheets financing them. Financial and insurance activities grew 1.9% on a rising loan book while the wider economy shrank 2.9%. That divergence is the reconstruction being intermediated, and it should persist while the civil-engineering pipeline runs.

Tourism is a winter-book story and the winter book is not yet visible. July’s arrivals moved the wrong way. I would want to see forward bookings before paying for a recovery in that cash flow.

Alumina is not a trade at all. It is a capital-expenditure decision belonging to someone else, on a timetable they have not published.

On duration: headline inflation at 7.5% against a 5.50% policy rate is a negative real policy rate, in an economy whose central bank has said plainly it will act if second-round effects embed, under a governor whose reaction function the market has not yet observed. That combination does not pay you to extend Jamaican dollar duration at current levels. I would keep reinvestment optionality short until the Bank attaches a credible date to the return to band.

And a word for the saver, because the arithmetic has moved against her while nobody was looking. In June I wrote that a conventional Jamaican savings product paying under one percent, against inflation of 4.3%, lost roughly nine dollars of purchasing power for every one it earned. At 7.5%, that ratio is now nearer fifteen to one. On J$500,000, that is about J$2,500 earned against roughly J$37,500 lost. Nothing about the savings statement changed. Everything about what it means did.

The banana takes nine months. The refinery takes a decision. The winter book takes a season. None of them takes an opinion. Our work is to know which is which, and to price accordingly.

Have a good week.