Home' Trinidad and Tobago Guardian : May 3rd 2015 Contents Despite some near-term chal-
lenges, confidence is growing
among T&T s industrial com-
panies. According to the Busi-
ness Confidence Report pub-
lished by the Central Bank of
T&T (CBTT), the country s "assembly and
related industries" are upbeat about the next
six to 12 months. Looking to take advantage of
the government s efforts to diversify the economy
away from hydrocarbons and broaden export
markets, these businesses are poised to expand.
The CBTT publishes a quarterly business
confidence indicator (BCI) that ranges from
+100 (maximum optimism) to -100 (maximum
pessimism). The BCI increased for the business
community as a whole during the fourth quarter
of 2014 to +42, up from +37 in the preceding
quarter, an outlook that the bank characterised
as "general optimism". Assembly and related
industries led the way with a BCI of +74, ahead
of construction at +56, hotels and guesthouses
at +39, and agriculture at +24.
"The general increase in optimism occurred
despite the initial fall in the price of oil and the
tensions in Europe and the Middle East, possibly
in anticipation of the Carnival season, to be fol-
lowed by general elections later in 2015," the
central bank said.
According to the T&T Manufacturers Asso-
ciation (TTMA), the country has one of the
largest manufacturing sectors in the Caribbean
region with an annual turnover of around
TT$7.9bn (US$1.3bn), or 8.5 per cent of GDP
in 2014. The industry has traditionally been
overshadowed by sectors such as oil and gas or
financial services, while shortages of skilled
labour, the relatively small size of the market
and high logistics costs have hampered growth.
However, with the oil and gas sector hard hit
by the fall in oil prices, there is renewed interest
from industrialists to capitalise on plans to diver-
sify the economy. Ramesh Ramdeen, CEO of
the TTMA, noted that the slump in oil prices
coincided with the emergence of the manufac-
turing sector from a downturn dating back to
the global economic crisis of 2008.
"Every curse has a silver lining," he told OBG.
"In the last crisis we found that the non-oil
sector of the economy had to carry us forward,
and we are better placed to diversify now. Man-
ufacturing represents 9 per cent of GDP and
we could go up to 12-15 per cent in the right
Looking beyond the Caribbean
Local industrialists can count on a number
of strengths, including low energy costs, and
although the domestic market is relatively small,
they are able to supply products to most of the
eastern Caribbean. The country is particularly
strong in food, beverages and tobacco, as well
as chemicals and non-metallic minerals. Com-
bined, these segments account for two-thirds
of the manufacturing sector s output. T&T also
has an advantage in metals as it is home to an
iron and steel mill operated by Arcelor Mittal,
which supplies steel to the Caribbean region
and Central America.
While there is a degree of uncertainty this
year with the prospect of a change in govern-
ment; general elections must be held by Sep-
tember at the latest. The business community
is aggressively pursuing opportunities.
One of its goals is to develop new export
markets. The TTMA is involved in an upcoming
trade mission to Panama, with companies look-
ing to other parts of Central America and beyond
for expansion. Local businesses have even found
opportunities in the troubled economy of nearby
Venezuela, responding quickly to supply scarce
items like toilet paper and tissues.
During his visit to T&T in February, Venezue-
lan President Nicolás Maduro discussed a pos-
sible barter agreement covering crude oil for
manufactured products with his host, Prime
Minister Kamla Persad-Bissessar. The country
already exports petrol, machine parts, air con-
ditioning and refrigerator spare parts, toiletries
and cement products to Venezuela.
Pilot plan to ease labour shortages
However, the sector still faces several chal-
lenges, including transport inefficiencies and
labour shortages. Industrialists say they are
facing a lack of skilled and unskilled workers,
in part due to generous government work pro-
grammes that have kept the local economy at
near full-employment levels.
Both the TTMA and the American Chamber
of Commerce of T&T (AmCham) have suggested
that as part of a pilot, some people on the gov-
ernment-funded Community-based Environ-
mental Protection & Enhancement Programme
(CEPEP) be reassigned and retrained to work
in the private sector.
Trade Minister Vasant Bharath recently said
the government is considering 600 jobs for the
pilot project. "What will happen is that these
employees will be taken directly out of CEPEP
and they will be given an opportunity to work
with these organisation with a training pro-
gramme in place, with certain minimum wages...
which would be significantly higher than what
they are currently earning," he said. Sectors to
be targeted in the programmes include man-
ufacturing, textiles and fast-food restaurants.
Improving transport efficiency is another
long-term project within the country as the
government invests in new highways and
increased port capacity to facilitate greater links
across the islands. It is also hoped that such
investments will further boost confidence among
industrial companies as the government looks
to expand non-oil sectors.
Marco Binenti, Oxford Business Group
editorial manager for T&T
SUNDAY BUSINESS GUARDIAN www.guardian.co.tt MAY 3 • 2015
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Industry upbeat despite fall in oil prices
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