Trinidad and Tobago Industries at a glance

Trinidad and Tobago is the wealthiest country in the Caribbean as well as the third richest country by GDP (PPP) per capita in the Americas after the United States and Canada. Furthermore, it is recognised as a high income economy by the World Bank. Unlike most of the English-speaking Caribbean, the country's economy is primarily industrial, with an emphasis on petroleum and petrochemicals. The country's wealth is attributed to its large reserves and exploitation of oil and natural gas.

The country has earned a reputation as an excellent investment site for international businesses and has one of the highest growth rates and per capita incomes in Latin America. Recent growth has been fuelled by investments in liquified natural gas (LNG), petrochemicals, and steel. Additional petrochemical, aluminum, and plastics projects are in various stages of planning.

Trinidad and Tobago is the leading Caribbean producer of oil and gas, and its economy is heavily dependent upon these resources but it also supplies manufactured goods, notably food and beverages, as well as cement to the Caribbean region. Oil and gas account for about 40% of GDP and 80% of exports, but only 5% of employment.

Trinidad and Tobago possessed an industrial base that was unmatched in the Caribbean in the late 1980s and, for a country of about 1.2 million people, perhaps in the world. As new heavy industries came on-stream in the early 1980s, Trinidad and Tobago was a producer of oil, asphalt, natural gas, ammonia and urea fertilizers, methanol, iron, and steel. Petrochemicals based on natural gas became the centre of the industrial strategy envisioned in the 1970s to diversify away from oil and export agriculture. In 1985 the petroleum sector accounted for 24 percent of GDP and nearly 70 percent of export earnings, and it affected most major sectors of the economy. The country also contained a large construction sector. Large industrial projects, asphalt roads, and government housing projects were responsible for the sector's prominence for decades, frequently making it a barometer of the economy's general health. The manufacturing sector was relatively small compared with the rest of the economy. Manufacturing, historically linked to agricultural processing, was very modern by the 1980s and comprised the assembly of automobiles, televisions, and refrigerators and the production of steel. Light manufacturing was less significant, as Trinidad and Tobago tended to import many smaller consumer items.

The industrial sector of the economy is dominated by the capital-intensive petroleum industry. Industry accounted for approximately 57% of the GDP, agriculture 0.7%, and services for 42.3% in 2004. Trinidad and Tobago had essentially an agricultural economy up to the beginning of the twentieth century when sugar production played a dominant role and the cultivation of cocoa, coconuts, and coffee played lesser parts. The socioeconomic characteristics of Caribbean agriculture are well defined and include an aging farming population, excessive dependence on export markets, absence of marketing and processing capability, and both tariff and nontariff barriers. These influence the incomes generated by agriculture and hence the investment in agricultural development. Long-established industries are those processing raw materials of the farm, forest and sea; foremost are sugar, molasses, and rum, followed by fish, lumber, fats and oils, and stock feed. Manufacturing products include matches, angostura bitters, soap, confectionery, and clay products. Newer industries include petroleum refining, petrochemicals, concrete products, canned citrus, bottled drinks, glass, drugs, chemicals, clothing, building materials, and metal goods.

The most important industrial center is found at the port at Point Lisas. Many new industrial plants have been established under the benefits of the country's New Companies Act (1997). The manufacturing sector has contributed a substantial share of the GDP since the 1970s. After the establishment of the free zone program in 1993, manufacturing investment soared. Caroni Inc., the government-owned sugar company and the largest employer on Trinidad, undertook a major revitalization project in 1998.

The petroleum sector, which more than doubled its growth rate to 1.8% in 1996, fell to 1.1% in 1997 due to a continuation of declining oil production. Rising prices in the early 2000s caused the petroleum sector to remain stable, however. Diversification of the petrochemicals industry and investments in other heavy industry and manufacturing may broaden the export base; but hydrocarbons will continue to provide at least 25% of foreign exchange earnings. Trinidad and Tobago's sole oil refinery had a production capacity of 160,000 barrels per day in 2002. As of 2002, the natural gas sector was expanding, with huge discoveries adding to the country's 80 trillion cubic feet (Tcf) gas base. The Atlantic LNG plant was due to expand over a four-year period, creating the largest single and sustained increment in growth in the country. The LNG plant began operations in the 1990s as the government attempted to increase oil exploration and production by giving contracts to US companies. It was one of the most ambitious projects, with British Gas (26% ownership) and Spain's Repsol (10%) joining two US companies—Amoco, with the largest stake (34%) and Cabot (10%).

Trinidad and Tobago has made a transition from an oil-based economy to one based on natural gas. In 2004, natural gas production averaged 2.9 trillion cubic feet per day (tcf/d), an increase of 12.9% from 2003. The petrochemical sector, including plants producing methanol, ammonia, urea, and natural gas liquids, has continued to grow in line with natural gas production, which continues to expand and should meet the needs of new industrial plants coming on line in the next few years.

The non-energy sector grew at a slower pace in 2004. Output in this sector increased by a modest 3.8% in 2003 and 2.9% in 2004 with the impetus coming from the manufacturing and services sectors. The rate of growth in the manufacturing sector was 6.6% in 2004, thanks to the food, beverages and tobacco, and assembly-type industries. The service sector grew by 2.9%, led by construction. The construction sector growth was due mainly to government investment in housing and infrastructure, and ongoing projects in the energy sector. Performance in the agriculture sector has been weak and declined by 20.2% in 2004. The decline in output resulted largely from the shrinking and restructuring of the sugar industry.