Dr. Grant Gibbons On GDP Economic Report

September 9, 2014

Grant Gibbons ”We are optimistic that with the economic and policy changes we have initiated to date, Bermuda’s economy is heading in a much better direction,” Minister of Education and Economic Development Dr Grant Gibbons said.

Dr. Gibbons said, “Last week the Department of Statistics released their annual Gross Domestic Product [GDP] report showing economic activity in Bermuda for the calendar year ending December 31st 2013, the first full year under the new OBA Government. The good news is that the report paints a picture of an economy turning the corner after four prior years of unprecedented decline.

“The One Bermuda Alliance Government is working tirelessly to revive Bermuda’s economy on many fronts. We are working to attract new companies to the island, working with hotel developers to get new properties built and retraining Bermudians to qualify for jobs in a wide range of industries.

“The OBA promise was jobs for Bermudians, and this is our primary focus. In early 2013 our initial aim was to stabilize Bermuda’s economic foundation and bring discipline back to public finances in ways that restore confidence, opportunity and hope.

“It is good news that our GDP – a measure of the total economic activity in Bermuda – increased by almost one per cent in 2013 – the first growth in our economy in five years. It is true that when adjusted for inflation, GDP was down 2.5 per cent.

“It is also true that all economic sectors had not turned the corner in 2013 – but sustained, across-the-board economic progress does not happen overnight. Nevertheless, there were encouraging signs that a number of sectors began to recover.

“More air arrivals in 2013 helped the island’s hotels increase room sales by 9 per cent. Food and beverage sales also increased 14 per cent.

“The International Business contribution to GDP grew for the second consecutive year, increasing 3.9 per cent in 2013. We are optimistic that 2014 will also be a good year for growing this important sector of economy, which makes up 26 per cent of our overall GDP. [GDP contribution should not be confused with foreign currency earnings, where balance of payments figures show that international business makes up the lion’s share of this critical financial contribution to our island.]

“An increase in goods imported in 2013 led to a 20 per cent increase in cargo handling services. This increase, along with other increases in spending on items such as cars, which increased 20 per cent in 2013, show increased consumer confidence and willingness by residents to make purchases they may have postponed for the last few years as the economy worsened.

“There are other positive indicators in the report that show that while still fragile, the economy is showing increased signs of stabilisation.

“However, some good news doesn’t mean the economy is good for everybody. The less promising aspects of the GDP report confirm that some sectors, such as the restaurant industry and the construction industry are still struggling. In 2013, the construction contribution declined by 4.4 per cent after experiencing four prior years of declines as high as 22 per cent. A slowdown in construction in 2013 was to be expected as large projects such as the new acute care wing of KEMH Hospital were close to completion.

“Nonetheless, there are encouraging signs that construction will ramp up again as new hotel properties, including the former Club Med site, Morgan’s Point and Ariel Sands are developed and renovated. The hospitality sector will also be boosted by the prospect of at least one World Series Event from the America’s Cup in 2015/2016 and even more if Bermuda is ultimately selected to host the Finals in 2017.

“The GDP report highlights the loss of 227 jobs during 2013 in the construction industry, but also in the wholesale and retail trade sector. The Department of Statistics annual Employment Survey taken in August 2013, also showed job losses for Bermudians in the previous 12 months. Although the decline in jobs continued into 2013, the job losses were approximately half of the more than 1,050 job losses seen in the 2012 Survey, suggesting an improving trend in what has been a very difficult job market.

“What is the OBA Government doing to get Bermudians back to work?

“We have launched the comprehensive National Training Plan that will provide Bermudians with opportunities to re-train in industries for which there are currently openings. The Plan, which can be found online on the Government portal under the Ministry of Home Affairs, identifies thousands of jobs available locally and the Government is doing all they can to ensure Bermudians are hired for these jobs.

“The Department of Workforce Development is implementing the Plan and assists with many aspects of career guidance including job referrals, resume writing and interview preparation, career assessments, further education assistance and more. The Department has also launched the Bermuda Jobs Board website and partnered with Bermuda Cable Vision to show job openings on Channel 87. The Bermuda Economic Development Corporation also assists entrepreneurs to start or enhance existing small businesses, which are the backbone of any economy.

“Hotel developments, including the Fairmont Hamilton Princess and Pink Beach, are underway and will provide jobs during construction and once opened. We have passed new business legislation to make Bermuda more attractive to investment funds, asset management, trust business and new company formation. In addition, the OBA Government enhanced the Job Maker’s Act to encourage the retention of existing jobs on island.

“The very healthy 16 per cent overall increase in 2013 in new international business incorporations and the 72 per cent increase in new insurance entities in 2013, show confidence by foreign investors in the future of Bermuda’s economy. These companies create jobs both directly and indirectly. They bring much needed foreign investment to the island and also utilize local professional service firms and other local services across many sectors of the economy.

“We have seen an increase in retail sales in four out of the first six months of 2014, an increase in planning applications and encouraging signs of activity in the real estate market. In addition, the encouraging positive increase in new company formations has continued into the first half of 2014. All these are positive indicators that economic activity is increasing and employment opportunities are growing.

“We continue to work on controlling public sector spending, and the recently released six-month update from the Ministry of Finance shows we are on track with our fiscal discipline plan, having reduced government spending by 7.4 per cent and increased revenue 2.3 per cent.

“Like all Bermudians, we are concerned that economic recovery and job growth is a slow process. We are working hard to find ways to speed the process up, but even the Opposition Leader last year acknowledged the challenge when he said, “No government can create jobs…Governments can only cultivate the conditions where jobs can be created, and that can only happen when we face the truth and take decisive action.”

“Following the prolonged period of economic downturn and a severe loss of confidence in Bermuda’s economic future, the OBA Government did not expect to see an instant turnaround in 2013. The record of other countries whose economies are more diversified than Bermuda’s has shown that recovery and growth take time.

Dr. Gibbons concluded, “However, we are optimistic that with the economic and policy changes we have initiated to date Bermuda’s economy is heading in a much better direction, with growing confidence, as we move through the second half of 2014 and into a brighter 2015.”

The full 15-page GDP report courtesy of the Department of Statistics is below [PDF here]

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Comments (34)

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  1. watching says:

    I am tired of the government championing new company registrations every quarter. How has this translated into jobs? Have they done a study to see how many jobs have been created from these new entities? Its fine and dandy to have the new registrations but stop trying to use them to infer that they are adding anything much to our economy other than licence fees to the government coffers.

    • Sandgrownan says:

      The Government coffers need all the help they can get.

    • LiarLiar says:

      Anything to say about the other points made?

      Like an increase in air arrivals and hotel bookings, the slowdown of job losses, the commencement of several large construction jobs in the hospitality sector which will be a boost to both industries, the actual growth of IB which is the main source of foreign currency earnings and Govt revenue, improvement in the food and beverage sector etc.?

      Also, those registrations provide much needed Government revenue which assist in keeping the bloated civil service funded to protect the jobs that you and yours vehemently want to protect.

      I know you see nothing good in this Government and will never ever acknowledge any progress achieved (as evidenced by your daily posts/rants) but there has been an improvement no matter your feelings. It took years for the previous adminsitration(s) to destroy BDA’s once vibrant economy and it will take probably twice as long to recover.

      As Dr. Gibbons noted there is a long way to go, but nevertheless there has been incremental progress and improvement and that has to be viewed as a positive no matter ones over zealous partisan loyalties.

    • serengeti says:

      You’re not ‘watching’ that hard. There are several new companies with physical presence and who have been hiring employees.
      By the way, the license fees ‘to government coffers’ do add to the economy. Every dollar collected by the government helps keep government employees employed.

    • AgeBees says:

      I agree – it can be a difficult statistic to find truth in. One incorporation could lead to 100 jobs, but 100 incorporations might lead to zero jobs. It’s not just license fees though, they need corporate administration which often goes to the law firms, which are Bermuda employers.

      The trend is what is encouraging…the more you have coming into Bermuda, sends a positive signal to the rest of the world that might be looking for places to incorporation. As I said earlier…it takes just one that leads to a lot of jobs.

    • Fact Finder says:

      So you think that when companies register elsewhere no jobs are lost. You do remember the countless number of people that lost jobs at all three banks, at Appleby and other law firms don’t you? Its all connected. No different than when the previous government started flexing their muscles and mouthing off, the companies fled. And with them so went jobs in banks, real estate, at the airport, hotels and grocery stores. Its all connected my friend.

      But, if you prefer the 14 years of PLP governing , I don’t know what to tell you. Some people can’t be helped. Sad thing is that there were many good, honest and capable people in the PLP Including Ms. Cox) but they sat by and said or did nothing while others swung the wrecking ball.

      • Kangoocar says:

        @fact finder, sorry but I don’t agree with you saying there was many good, honest and capable people in the plp including ms cox, while I do agree that they sat by and did nothing while the wrecking ball was being swung, my opinion is, that makes them just as guilty!!!!!!

  2. San George says:

    Until the real estate sector is stabilized, the largest investment for most of us, the OBA is hoodwinking us all. Lower interest rates or lower taxes in order to stimulate this economy. Dr. Gibbons knows all too well the impact that this depression is having on people. If the Gibbons’ took a lick, what has been the impact on the mere mortals?

    And by-the-way, no bank in their right mind would contribute/lend a dollar to building a hotel in Bermuda. That talk must stop.

    • serengeti says:

      It was Burch who gleefully loved every minute of it when house prices were decreasing and rents were falling. “I hope to see more of it”, he said, as the biggest investment most Bermudians ever make was dropping in value as a result of deliberate PLP policies.

    • Sickofantz says:

      I see from the report that real estate has declined by 2.3 percent if this translates into lower rents for the neediest then it has to be a good thing. Also if it reduces the overall cost of doing business in Bermuda then that should also be a good thing. (Property and rents are much cheaper in Ireland and Cayman as well as other tax havens). History has shown that it is better to build a home you can thrive in rather than on. A home is a home first and foremost and not an investment. For a tiny island property and rents are still far too expensive for most.

    • SMH says:

      OBA is hoodwinking you? LOL! You were completely and utterly seriously HOODWINKED for 14 friggin’ years! Time to start thinking for yourself and not for your party. Be thankful that things are starting to stabilize and the we are no longer sinking exponentially. Hoodwinked..HA

      • Coffee says:

        Most of the money in your pocket was made in the 14 years of PLP governance ! Between ’02 and ’07 contractors big and small built on every postage stamp that wasn’t licked . Anyway your a first class fool , and a unrepentant OBA shill ! SMH … Stupid Mother Hocker !

      • mixitup says:

        What I find amazing is this farce of 14 years of destruction.. The charts tell otherwise. This Island saw growth it had never seen before under the PLP Government, but these goon bags on Bernews would have you believe otherwise, why? Likely because they sooo wanted them to fail. Now I agree more may have been post 2007 to manage through the global collapse, but let’s say that the PLP government just went along and cut cut cut, where would we really have been then? So to shout from the mountains that the PLP was a 14yr wrecking ball tells more about yourselves than anything.

  3. shuthemdown says:

    It is good news that our GDP – a measure of the total economic activity in Bermuda – increased by almost one per cent in 2013 – the first growth in our economy in five years. It is true that when adjusted for inflation, GDP was down 2.5 per cent.

    GTFO of here

    it is down.
    there is no way we are this stupid to believe it is up during this gov.

    of course it is measured against inflation


    • Onion says:

      So I guess you can’t read the whole sentence?

    • Fact Finder says:

      So exactly what did you believe and say when the mighty PLP produced their reports showing steady economic decline, inflation, loss of jobs, companies moving to other jurisdictions or all the unaccounted for monies? Where you this opinionated and vocal?

      I don’t think you were. Perhaps you were one of the few that benefitted. Are you friend or family?

  4. Your nose is growing longer P says:

    We had less air arrivals in 2013 Doc. We had more cruise ship arrivals keep it REAL!

    • Fact Finder says:

      Wow what a feat, more cruise ship arrivals in 2013. And they managed to do that even though a certain minister within the PLP government at the time forgot to sign the cruise ship contract with one of the cruise lines resulting in I believe 12 less cruise ships? Or did you forget that little fact?

      I just doing as you requested…keeping it real.

  5. Double D says:

    Then how did hotel bookings increase?

  6. swing voter says:

    3 more years to go b 4 I have to make a decision on election day. Better find a way to keep those election promises or I may have to look the other way…..again

    How’s that hotel project going at Morgans point or Club Med or South shore? What about a regular small cruise ship for St. George, or Hamilton….what about that Casino ship at marginal wharf?

  7. Evie says:

    Does Grants nose seem longer to you Spin Spin Spin remember Pinocchio you can’t tell a lie SMDH hahahahaha you are funny

  8. Well ….I for one would not take this for “granted!”

  9. Triangle Drifter says:

    We got off at the last exit on the PLP highway to financial hell just in time. The end was in sight. That is the good news.

    The bad news is that we entered that exit at a very high rate of speed & there is no guarantee that we will make it round the bend to the OBA highway to recovery & have a much better financial view.

    • mixitup says:

      Gotta love this ^^Paid Blogger^^ – He is committed to the cause. Even though his rants fall on deaf ears.

      • Triangle Drifter says:

        In addition to being mixed up you apparently can’t count very well either. Take a look at the ‘likes’ sometime. Oh, & since you are so sure that the OBA has “paid bloggers” maybe you know where I can pick up my check. Between tourisms “Platinum Period” & the wonderful job the PLP did at chasing IB out of Bermuda & creating all of the empty apartments & houses the OBA has no need to pay me or alot of others to support them.

        Sorry, no, not even a member.

  10. Coffee says:

    The UBP/OBA shills who repeat the lie that Bermuda suffered through fourteen years of financial horror under the PLP will never give credit for the unprecedented growth in both economic and population growth for eight years .

    The UBP carrion could only sit on the sidelines hoping to get in and take charge … They couldn’t !

    So they wished for the government to fail , they wished for the economy to fail , they had no control over either , but their jealousy and wishing was strong .
    Eventually their wishes became true ….. Be careful for what you wish for ..

    • jt says:

      A high school class could have run the economy after 1998 by simply following the sound practices already in place.
      Once the policies and philosophies of those in charge changed the results weren’t quite so rosy.
      Question is…where is the plp now? Closer to the second half of their 14 years I’d say.

  11. Under Grounds Of National Security says:

    Dr Grant Gibbons should take a very humble moment to say thank you to Craig Cannonier, your former OBA leader and ex-premier.

    No? One year under his leadership did not make a difference, OBA bloggers?

    Sadly the OBA could not have pulled off this remarkable recovery without him. He made his mark beyond your “scandal.”

    Black leadership does have its value in Bermuda.

    • jt says:

      Your train of thought on leadership demonstrates a key difference in how the two parties function. (Said with no consideration to your last sentence…which should be irrelevant)

  12. Under Grounds Of National Security says:

    Place yourself in the real world of political strategic thinking.

    Mr Cannonier’s race was a major consideration when he won the leadership of his party. It was a major consideration when he won the general election.

    Had it not been the case then why did Dr Ewart Brown trample over Michael Dunkley during the Brown/Dunkley election?

    But then you focused on Mr Cannonier’s race rather than his brief, vital contribution to party’s overall wellbeing in winning that election.

    Your rebuttal attempts to negate his contribution – period.

  13. more than enough says:

    No apology to the children of delwood?
    Between you and p pamplin I think something should be said…
    All this talk of improvement still means little, as usual, bermuda is slow to the wicket.
    And all these promises of granduer, events, construction, making it rain $$$ on us all, are still only hopes and dreams.
    In one paragraph the doc summed it up for us; ‘gdp is up 1%, the fisrt increase in 5 years, ‘ followed by; ‘when adjusted for inflation, gdp is down 2.5 %
    If this is indeed a sign of progress, this recovey is going to take many many years…
    We need some people, to step up, and do the peoples work for free.
    If no progress is made, or it’s too hot in the kitchen, step aside and let someone else get the job done.
    No shame in that as long as you tried your best.
    No progress, and still running away with six figure salaries annually, definitely not worth the money.

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