A measure of the size of Bermuda’s economy shrank in the third quarter of last year, as the value of exports fell while imports rose.

The island’s gross domestic product in the July through September period was estimated at $1.36 billion — down 0.5 per cent from a year earlier, or down 2.2 per cent when inflation is taken into account.

The data were published today by the Department of Statistics, which in its commentary attributed the economic contraction to a narrowing trade surplus.

The net surplus in trade in goods and services fell $36.6 million, or 20.3 per cent from a year previous.

“Receipts from the exports of services fell $17 million reflecting lower premiums collected on insurance services,” the commentary stated.

“Imports of goods and services, which have a downward effect on GDP growth, rose $19 million reflecting higher payments for imported goods as well as increased outlays for professional and management consultancy services.”

The island emerged from a six-year recession in 2015. But growth was less consistent last year, with 0.4 per cent shrinkage in the first quarter and a 0.7 per cent gain in the second quarter leading up to the third-quarter decline.

The third quarter was up against a tough year-over-year comparison as real growth spiked 4.6 per cent in the same period of 2015.

The figures indicate that residents tightened their purse strings for a second successive quarter, as household final consumption, or expenditure on goods and services, increased slightly to $783.1 million — representing a decrease of 1.3 per cent after inflation, following a 1.4 per cent decrease in the second quarter.

Government consumption increased 5.2 per cent in the third quarter, due mostly to health services. After adjusting for inflation, government consumption increased 3.2 per cent.

Gross capital formation, or investment in fixed assets, increased $17.2 million or 10.5 per cent, reflecting higher investment in machinery and equipment, particularly industrial machinery and transport equipment. In real terms, gross capital formation advanced 10.7 per cent, the commentary stated.