• U.S. manufacturing activity slowed in June after reaching a four-year high in May, as some of the boost from businesses front-loading orders to avoid shortages and higher prices caused by the Middle East conflict began to fade. The Institute for Supply Management (ISM) Manufacturing PMI eased to 53.3 from 54.0, but remained above the 50-point threshold, indicating continued expansion.
• Despite the moderation, manufacturing remained supported by the artificial intelligence (AI) investment boom, with the sector expanding for a sixth consecutive month. Fourteen industries reported growth, including electrical equipment, machinery, primary metals, and computer and electronic products.
• According to the ISM, new orders slowed only marginally, while factory inventories rebounded after a prolonged period of contraction. Supply chains also improved somewhat following the U.S.-Iran ceasefire, with supplier delivery times easing from May levels.
• Manufacturers continued to report elevated input costs, although the pace of price increases moderated as lower energy prices reduced some raw material costs.  The ISM's prices paid index fell to 73.0 from 82.1, while shortages persisted for products such as semiconductors, electronic components and memory chips.
• References to the Iran war and pricing volatility declined compared with May, although respondents said the conflict, tariff uncertainty and concerns over the reopening of the Strait of Hormuz continued to weigh on costs and business planning. Manufacturers of food, beverage and tobacco products said input costs remained elevated, while transportation equipment producers warned tariffs continued to pressure profitability and demand.
• Factory employment remained subdued, but hiring intentions improved. About 64% of respondents reported they were hiring, up from 50% in May, while economists expect the June employment report to show 110,000 jobs added and the unemployment rate remaining at 4.3%.
• While U.S. manufacturing is still expanding, the momentum is cooling as conflict-related front-loading fades. At the same time, elevated input prices, tariff uncertainty, and shortages in semiconductors and electronic components could keep cost pressures high, reinforcing the Fed’s cautious stance on inflation.

(Source: Reuters)

• The impact of Hurricane Melissa continued to weigh on Jamaica's economy in the first quarter of 2026. According to the Statistical Institute of Jamaica (STATIN), real GDP (2015 constant prices) contracted by 4.1% year-over-year, below the 5.9% decline projected by the Planning Institute of Jamaica (PIOJ). The downturn reflected contractions in both the Goods-Producing Industries (-7.3%) and the Services Industries (-3.0%).
• Within the Goods-Producing sector, structural damage and operational disruptions led to contractions in three out of four industries. Agriculture, Forestry & Fishing (-18.3%) recorded the largest decline due to extensive hurricane damage to crops and livestock, with sharp reductions in fruit, other crop, and yam production. Banana and plantain output fell by 86.0% and 83.7%, respectively.
• Meanwhile, Manufacturing (+0.6%) was the only Goods-Producing industry to expand, driven by increased cement production to meet strong demand from hurricane recovery and reconstruction activities.
• Similarly, most Services industries contracted, led by Accommodation & Food Service Activities (-16.6%), Electricity, Water Supply & Waste Management (-10.2%), and Transport & Storage (-5.5%), reflecting hurricane-related disruptions, lower tourist arrivals, and reduced utility consumption. Financial & Insurance Activities (+2.9%) was the only Services industry to grow, supported by stronger commercial banking performance, higher net interest income, and increased transaction and commission fees.
• Looking ahead, the Bank of Jamaica (BOJ) expects some recovery in FY 2026/27 as reconstruction efforts from Hurricane Melissa advance and tourism-related activity, particularly in the western parishes, resumes. The BOJ projects that real GDP will expand by 1.0% to 3.0% in fiscal year 2026/27. However, downside risks persist, particularly related to the potential adverse impact of the conflict in the Middle East on global energy prices, consumer disposable incomes, production costs and sentiment on key service industries such as the Tourism sector.

(Sources: STATIN & NCBCM Research)

• Data released by the Statistical Institute of Jamaica (STATIN) shows the unemployment rate increased to 3.7% in April 2026 from 3.3% in April 2025, reflecting a rise in the number of unemployed persons alongside weaker labour market conditions.
• Jamaica's labour force declined to 1,473,900 persons, with the labour force participation rate falling to 68.4% from 69.3% a year earlier. The reduction was driven by declines in both the male and female labour force, signalling lower participation in economic activity.
• Total employment fell by 1.8% to 1,418,800 persons. Male employment declined by 1.1%, female employment by 2.5%, while youth employment recorded a sharper 9.1% decline, highlighting continued weakness among younger workers.
• The number of unemployed persons increased by 10.0% to 55,000, contributing to the higher unemployment rate. Youth unemployment also worsened, rising to 21,000 persons, with the youth unemployment rate increasing to 11.7%.
• The number of persons outside the labour force increased by 20,500 to 681,900, with increases recorded among both males and females, reinforcing the trend of reduced labour force participation.
• The April 2026 labour market results continue to reflect the lingering effects of Hurricane Melissa, particularly across Jamaica's western parishes. Disruptions to economic activity likely contributed to lower employment, weaker labour force participation, and higher unemployment, indicating that the labour market remains under pressure during the recovery period.

(Sources: STATIN & NCBCM Research)

• The Bahamas' economy maintained its momentum in the first quarter of 2026 (Q1 2026), but the underlying data reinforce the view that growth is settling into a slower trend. According to the Central Bank, construction activity continued to support output through a pipeline of tourism and energy infrastructure projects, while private sector credit expanded by 0.8% in the quarter.
• However, economic indicators are converging toward their medium-to-long-term potential following the exceptional post-pandemic rebound that averaged 8.7% annually between 2021 and 2024, and the external environment has become less supportive since the onset of the Strait of Hormuz closure.
• The composition of Q1 tourism arrivals illustrates why the headline growth figures can be misleading. Total visitor arrivals grew by 17.5% to 3.8 million, but this was driven almost entirely by a 19.6% surge in cruise visitors, who account for 87% of arrivals by volume but only around 10% of tourism expenditure.
• Air arrivals, which proxy for the stayover segment that generates roughly 28% of Gross Domestic Product (GDP), grew by just 5.2%, and the United States (U.S.) passenger departures from Nassau airport, the source of over 80% of stayover visitors, fell by 2.6% in Q1.
• April data extend this trend, with U.S. departures falling a further 1.0% year on year (YoY), bringing the year-to-date (YTD) decline to 2.2%. The non-U.S. international segment continues to grow strongly, up 44.2% YTD, but from a small base that is insufficient to offset U.S. weakness, given that American visitors account for the overwhelming majority of stayover spending.
• The Hormuz-driven oil price shock will constrain economic growth through two channels. Higher airline operating costs are feeding into ticket prices, directly raising the cost of travel for US visitors at a time when consumer confidence is already under pressure from broader tariff-related inflation.
• Simultaneously, domestic energy costs are rising, with Bahamas Power and Light fuel surcharges up by as much as 8.8% YoY in Q1, eroding household purchasing power and weighing on private consumption, the largest component of GDP by expenditure. The government's fuel hedging programme will partially offset the upward price impact but cannot fully insulate the economy from these pressures. Furthermore, oil and jet fuel prices will average significantly higher in 2026 than in 2025 despite the June ceasefire.
• Looking ahead to 2027, growth is expected to remain subdued at around 1.7%, as the post-pandemic construction pipeline gradually winds down, hotel capacity constraints continue to limit upside in the high-value stayover segment, and the labour force grows only slowly. This trajectory is consistent with the view that the Bahamas is converging toward a long-run potential growth rate of around 1.7% per year over 2026–2035, well below the rates recorded during the post-pandemic rebound and reflecting the structural constraints of a small, tourism-dependent island economy operating near capacity.

(Source: BMI, A Fitch Solutions Company)

• On Wednesday, June 24, 2026, two powerful earthquakes (7.5 and 7.2 in magnitude) struck Venezuela, primarily affecting the states of La Guaira on the northern coast and the Capital District, including Caracas. The physical devastation, poor state response, and surge in socio-economic hardship will raise socio-political instability risks in the short-term, but BMI expects the government to weather the storm.
• While the earthquake undoubtedly raises economic risks in the near-term, the broader outlook remains unchanged while the extent of the damage continues to be assessed. The United Nations Development Programme (UNDP) puts initial estimates of physical damage at US$6.7Bn, within the broader range of US$8.7-US$4.7Bn, although that number is likely to increase.
• However, given strong international aid flows and a looser sanctions profile going forward, recovery efforts could drive strong investment (construction) activity and counterbalance the weakness in private sector demand. Additionally, oil production plays an outsized role in the broader economy outlook and ramp-up in production in the first half of 2026 (H1 2026), and future prospects remain quite robust.
• As such, BMI maintained its 10.0% real Gross Domestic Product (GDP) growth forecast for 2026. While data quality is dubious, the Venezuelan government itself is reporting real GDP growth of 2.5% year on year (YoY), in the first half of 2026 (Q1 2026), driven primarily by 3.4% export growth and 4.5% private consumption growth.
• That said, Venezuela’s economic position remains precarious. The damage caused by the earthquakes will raise gross financing costs for the economy to start to recover, which adds pressure to already complicated public debt restructuring negotiations.
• Reporting suggests that ongoing audits put the total public debt load to be restructured at US$240Bn, 200% of 2025 GDP, an uptick from the US$200Bn estimate at the beginning of the year. As such, a modest widening of Venezuelan bond spreads is expected as market pricing starts to include a higher risk premium. While progress is being made, the agency is sceptical that a new payment plan will be finalised and implemented before the start of 2027.

(Source: BMI, A Fitch Solutions Company)

• Britain's economy grew 0.6% in the first quarter of 2026, in line with the Office for National Statistics' (ONS) initial estimate, but households were squeezed even before the worst effects of the U.S.-Iran conflict started to feed through. Services were the main driver of growth, supported by computer programming, wholesale and advertising, partly offset by declines in rental companies and recruitment agencies.
• The first-quarter expansion marked the third consecutive year of strong Q1 growth, although the ONS said it continues to monitor concerns over potential seasonality in the data after reiterating that its review found no statistically significant seasonality.
• Despite the stronger economic growth, households were squeezed even before the worst effects of the U.S.-Iran conflict began to feed through. Real household disposable income per head contracted 0.8% in the first quarter, while the household savings ratio fell 0.7 percentage points to 8.9%, driven by lower non-pension savings.
• The economic outlook remains challenging, with business surveys and April economic data pointing to weaker momentum. Economists expect Britain's next prime minister, Andy Burnham, to inherit a difficult fiscal position, with tighter financial conditions, softer household spending and economic uncertainty expected to weigh on investment.
• The ONS revised fourth-quarter 2025 GDP growth down to 0.1% from the previous estimate, while full-year 2025 growth was revised to 1.3% from 1.4%. Looking ahead, the Bank of England's decision to keep interest rates at 3.75%, combined with investors pricing in a 25-basis-point rate increase by February 2027, is expected to prolong pressure on households.
• While first-quarter growth remained resilient, Reuters notes that much of the data predates the full impact of the U.S.-Iran conflict. Softer household spending, tighter financial conditions and elevated uncertainty suggest growth is likely to moderate in the coming quarters despite the strong start to 2026.

(Source: Reuters)

• Americans' attitudes toward the economy improved slightly in June as gas prices declined, although their outlook is still mostly negative by historical standards. The Conference Board's consumer confidence index rose 0.6 points to 91.2 but remained below 95.2 a year earlier and well below pre-pandemic levels, when the index regularly exceeded 120.
• Consumer confidence has been recovering only slowly from the impact of the U.S.-Iran conflict, which caused oil and gas prices to spike, accelerated inflation, and reduced inflation-adjusted incomes. Dana Peterson, Chief Economist at the Conference Board, noted that falling oil prices in recent weeks provided some relief to consumer inflation fears.
• Consumer appraisals of current business conditions improved slightly compared with May. However, perceptions of the labour market softened, with the share of Americans who said jobs are "hard to get" rising to 22.5% from 19.8% the previous month.
• Despite the weaker sentiment, consumers have continued to spend. A government report earlier this month showed consumer spending increased in May despite higher gas prices, with economists expecting steady consumer outlays to support approximately 2.5% annualised GDP growth in the April–June quarter.
• Falling fuel prices could provide further support to consumer confidence in the coming months. Average U.S. gasoline prices have fallen to US$3.85 per gallon, from more than US$4.50 after the U.S.-Iran conflict began in late February.
• While labour market sentiment weakened, economic conditions remain relatively resilient. Job openings held steady at 7.6 million in May, while economists expect the June employment report to show 100,000 jobs added and the unemployment rate remaining low at 4.3%

(Source: Associated Press)

• During its meetings on 25 and 26 June 2026, the Monetary Policy Committee (MPC) kept the policy interest rate at 5.50% and decided to continue measures to maintain stability in the foreign exchange market. The decision reflects the Bank of Jamaica’s (BOJ’s) view that, despite inflation remaining within its 4.0%–6.0% target range over the past three months, uncertainty remains high and maintaining current policy will help limit second-round inflationary effects from rising international commodity prices.
• Headline inflation rose to 5.5% in May 2026, remaining within the Bank's target range but exceeding its latest forecast. This marked the fourth consecutive monthly increase in 2026, driven mainly by higher prices for agricultural products and the pass-through of increased international commodity prices to domestic goods and services.
• Meanwhile, core inflation increased to 4.7% in May 2026, up from 3.9% in January, indicating that inflationary pressures are becoming more widespread beyond food and fuel. The increase reflects the impact of higher imported commodity costs filtering through the economy, suggesting that businesses are passing increased costs on to consumers
• Overall, headline inflation is projected to briefly rise above the 6.0% upper limit of the target range in the near term, although the breach is expected to be smaller than previously anticipated. Higher energy and transport costs, recent increases in public passenger fares, and stronger domestic demand linked to post-Hurricane Melissa recovery spending are expected to contribute to this temporary rise.
• Economic recovery continues but faces significant risks. The economy is gradually recovering following Hurricane Melissa, with GDP growth projected between 1.0% and 3.0% for FY2026/27. However, the outlook remains vulnerable to a prolonged Middle East conflict, which could raise airline fares and weaken tourism demand; a slower-than-expected recovery in the mining sector; tighter financial conditions in the United States; and reduced consumer purchasing power as inflation rises.
• The risks of inflation over the next eight quarters remain skewed to the upside, with the greatest threat being a prolonged Middle East conflict that could trigger further increases in global commodity prices. Despite these risks, Jamaica's external buffers remain robust. As at May 2026, Net International Reserves (NIR) stood at US$6.48Bn, equivalent to 26.6 weeks of goods and services import cover, more than double the accepted benchmark of 12 weeks. This strong reserve position has helped underpin exchange rate stability, with the Jamaican dollar appreciating modestly against the U.S. dollar year to date. The MPC reaffirmed that it will continue monitoring economic conditions closely and stands ready to adjust monetary policy if inflationary pressures intensify.

(Sources: Bank of Jamaica)

• United Oil & Gas (UOG), a UK-based oil and gas exploration company with offshore assets in Jamaica and the United Kingdom, reported a US$1.25Mn net loss for 2025, an improvement from the US$2.44Mn loss recorded in 2024, while year-end cash increased to US$1.7Mn following multiple fundraising rounds.
• Despite the stronger cash position, the company warned of material uncertainty over its ability to continue as a going concern, saying it needs either a farm-out partner for its Walton-Morant offshore licence in Jamaica or additional investor funding to finance future exploration. A farm-out would involve another company taking part ownership of the Walton-Morant licence in return for helping to pay for exploration.
• For United, a farm-out would mean selling a stake in the Walton-Morant licence in exchange for funding and technical expertise. The company requires fresh capital this year to continue advancing its offshore exploration programme in Jamaican waters.
• United has raised capital several times, including a £2.23Mn share placing during 2025 and about £486,000 from post-year-end warrant exercises, but directors acknowledged that further funding is not guaranteed.
• The company continued advancing its Walton-Morant licence, securing a two-year extension to January 2028, along with environmental and beach permits that enabled its offshore geochemical survey. Survey work completed in early 2026 detected C4 and C5 hydrocarbons in selected seabed samples, findings that could indicate a working petroleum system. However, no commercial oil or gas discovery has been made, and the results are being used to support ongoing discussions with potential partners.
• Chief Executive Brian Larkin described 2025 as a landmark year for the company, saying its immediate priority is securing a partner to help fund exploration in Jamaica while continuing work on its smaller UK oil project.

(Sources: Fidelity International and NCBCM Research)

• The proposed Local Companies (Control) (Amendment) Bill marks a significant shift in the policy environment for foreign-owned businesses operating in the Cayman Islands. The Bill, published in June 2026 and scheduled for parliamentary debate, would empower the Cabinet to suspend the issuance of Local Companies Control Licences to foreign-owned businesses, either broadly or within specific industries.
• Premier Andre Ebanks has framed the measure as a modernisation of 1970s-era legislation that no longer reflects Cayman's economic maturity, arguing that a skilled Caymanian workforce now exists to fill roles previously requiring expatriate enterprise. While no immediate widespread restrictions are anticipated, the discretionary and open-ended nature of the proposed power itself is a source of uncertainty for internationally oriented investors.
• The political pressures driving the bill are deeply rooted and unlikely to dissipate. The non-Caymanian share of the population has risen to a record 54.7% in 2025, up from 43.3% in 2016, as rapid economic growth has drawn a large expatriate workforce into financial services and hospitality. Housing costs have become the primary cost-of-living grievance among Caymanian voters, and all three parties in the National Coalition For Caymanians (NCFC) campaigned on pledges to improve economic opportunities for Caymanians and moderate immigration. A non-binding referendum held alongside the April 2025 election, which rejected cruise berthing infrastructure development, further illustrated the direction of public sentiment toward prioritising quality of life over unconstrained growth.
• The real estate sector will bear the brunt of early implementation, given its political salience and limited systemic importance to the broader economy. The government has explicitly identified property development as a priority area, reflecting voter grievances over housing affordability and the visible dominance of expatriate-owned enterprises in a market directly linked to the cost-of-living pressures that dominated the 2025 election campaign.
• That said, BMI does not expect the legislation to trigger sweeping intervention across the broader economy over the next two years, and the financial services sector in particular is well insulated by the government's own fiscal dependence on it. Unlike the financial services sector, which accounts for over 30% of Gross Domestic Product (GDP) and the large majority of government fee revenue, real estate presents a lower-risk target for intervention. A moratorium on new foreign-owned property development licences would be politically popular, economically containable in the near term and difficult for international investors to challenge given the discretionary framing of the legislation.
• Furthermore, the structural incentives for any Cayman administration to protect the offshore financial centre model are too strong to allow aggressive application of licensing restrictions in that sector. However, investors should treat the bill as an early signal of a broader political direction rather than a one-off measure. As the NCFC coalition approaches the next general election, due in 2029, campaigning pressures are likely to intensify demands for more visible Caymanianisation outcomes, raising the risk that the scope of intervention gradually widens beyond real estate into other sectors where expatriate-owned businesses are perceived to be crowding out Caymanian participation.

(Source: BMI, A Fitch Solutions Company)