Sectoral analysis

During the second quarter this year, the agricultural sector registered an increase of Lm0.2 million in gross value added, compared to the same period last year. At 2.3 per cent, the sector’s nominal contribution to the GDP was stable when compared to the relative period last year.

Gross value added in the fishing sector rose by 7.8 per cent to Lm0.9 million. The sector’s growth resulted from an increase in the value of fresh fish landed at the fish market and exports of both fresh and farmed fish.

At 0.4 per cent, the contribution of the mining and quarrying sector to gross value added was at the same level as in the same period last year. The gross value added attributable to this sector edged up by 0.5 per cent to Lm1.6 million. Within this sector, the compensation of employees and the operating surplus went up by 0.9 and 0.4 per cent respectively.

The manufacturing sector registered an overall fall of Lm5 million or 5.7 per cent in value added and a fall of 9.5 per cent in the compensation of employees.

There was a general downward trend in most manufacturing sub-sectors, the most significant being in the manufacture of textiles and textile products, the manufacture of leather and leather products, the manufacture of electrical machinery and apparatus n.e.c. and the manufacture of transport equipment. On the other hand, there was an improvement in the value added of the chemicals, chemical products and man-made fibres manufacturing sub-sector.

The relative contribution of the manufacturing sector to the GDP fell from 21.2 per cent to 20.1 per cent, compared to the same quarter last year.

The electricity, gas and water supply sector’s contribution to the GDP fell from two per cent in the second quarter last year to 1.2 per cent in the quarter under review. Its value added declined by 37.9 per cent to Lm5.1 million. Although output increased by six per cent, this was offset by an increase of Lm4.2 million or 40.7 per cent in the sector’s intermediate consumption.

This sector’s compensation of employees dropped by 4.4 per cent to Lm5.4 million.

In the second quarter this year, the contribution of the construction sector to the GDP stood at 4.6 per cent. This sector’s gross value added increased by Lm0.1 million or 0.6 per cent to Lm18.9 million when compared to the same quarter last year.

Such an increase reflected positively in the industry’s compensation of employees, but negatively in the operating surplus, with both factor incomes varying in level by 2.3 and -2.0 per cent respectively

The value added generated by the wholesale and retail trade sector rose by 3.9 per cent over the corresponding quarter last year. Compensation of employees working in this sector increased by 0.1 per cent over the same period last year. This sector’s contribution to the gross value added at basic prices increased from 11.4 per cent to 11.9 per cent in the period under consideration.

The hotels and restaurants sector’s value added declined by Lm1.4 million or 4.8 per cent, to Lm28 million. Within this sector, output, intermediate consumption and the compensation of employees declined.

The sector’s operating surplus stood at Lm6.7 million, a fall of 16.8 per cent over the same quarter last year. This sector’s relative contribution to the gross value added stood at 6.9 per cent.

The contribution of the transport, storage and communication sector to gross value added declined to 10.8 per cent.

In nominal terms, gross value added declined by 2.7 per cent to Lm43.9 million. This drop was wholly due to the air transport sub-sector’s performance. Turnover in the other sub-sectors remained practically unchanged, compared to last year’s levels.

The contribution of the financial intermediation sector to the GDP rose to 6.5 per cent from 5.2 per cent in the same quarter last year. Turnover in the banking sub-sector increased by 19.2 per cent. Turnover in the other sub-sectors remained at last year’s level. The same applies to gross value added. Value added in the banking sub-sector went up by almost 29 per cent, with the other sub-sectors’ value added remaining unchanged.

The contribution to gross value added of the real estate, renting and business activities went up to 14.2 per cent from 13.2 per cent a year ago. The industry’s gross value added expanded by Lm3.5 million or 6.5 per cent to Lm57.7 million when compared to the same quarter last year. As a result the sector’s compensation of employees and operating surplus increased by 2.9 and 6.9 per cent respectively.

The gross value added generated by the public administration and defence sector declined by Lm0.7 million or 2.2 per cent to Lm31.8 million from Lm32.5 million in the same quarter last year. On a disaggregated level, this represents a reduction in compensation of employees paid within government ministries and departments (-Lm2.5 million), and higher employment earnings within the extra-budgetary units (+Lm1.1 million). Employment income within the local councils sub-sector was by and large on the same level as in the corresponding period last year. The sector’s contribution to the GDP was 7.8 per cent, down from a share of 7.9 per cent in the second quarter last year.

The education sector registered a decline of 0.1 per cent in its value added. Within this sector, the compensation of employees fell by two per cent from that recorded in the corresponding quarter in the previous year. At seven per cent, the contribution to total gross value added at basic prices remained unchanged.

The health and social work sector’s value added, at Lm23.3 million, retained its 5.7 per cent share of the GDP. Output rose by 1.5 per cent, which, however, was offset by higher intermediate costs that increased by 8.2 per cent. This sector’s compensation of employees went down by 1.6 per cent to Lm17.8 million.

The gross value added of the other community, social and personal service activities (including private households with employed persons) edged up by Lm0.9 million or 4.5 per cent to Lm21.1 million. Output advanced by 19.5 per cent to Lm36.4 million while intermediate consumption increased by Lm5 million. Compensation of employees, however, fell by 20 per cent to Lm8.1 million.

Expenditure aggregates

In the quarter under review, nominal household final consumption expenditure increased by Lm7.9 million or 2.9 per cent.

At constant prices, this translates into a fall of 2.1 per cent. This was due to higher consumer prices in the second quarter this year when compared to the same period last year.

A decline in expenditure outlay was registered on furnishings, household equipment and routine house maintenance and communication.

Increases in consumers’ expenditure were recorded on food and non-alcoholic beverages, alcoholic beverages and tobacco, clothing and footwear, education and expenditure in restaurants and hotels, housing, water, electricity, gas and other fuels, health, transport, recreation and culture and on miscellaneous goods and services.

Compared to the second quarter of 2003, general government final consumption expenditure rose by Lm0.8 million or 0.8 per cent and reached Lm100.7 million. This increase was mainly the result of higher outlays on health and education. In real terms, government consumption declined by 4.5 per cent.

Outlays on gross fixed capital formation increased by 8.4 per cent to Lm113.7 million. At constant prices, the increase in investment amounted to 7.6 per cent.

Exports of goods and services decreased by 1.6 percent to Lm356.8 million, while imports of goods and services fell by 5.8 per cent to Lm365.5 million. Lower export prices of goods, however, meant that in real terms, total exports increased by 6.3 per cent. Imports, on the other hand, fell by 1.3 per cent in real terms, even though import prices fell.