A broad measure of Bermuda’s economic activity contracted in the first quarter of this year, according to a report released today.

Gross domestic product — the value of goods and services generated by the island’s economy — fell by 0.4 per cent in the first quarter when adjusted for inflation to $1.31 billion.

The decline follows four successive quarters of real GDP growth for the island in a strong 2017.

Today’s report from the Department of Statistics showed that GDP before inflation rose 1 per cent during the quarter.

The report said the main driver of the after-inflation decline in GDP was an 11.6 per cent, or $23 million decline in fixed assets, reflecting lower investment in machinery and equipment, such as vehicles and boats. However, investment in construction fixed assets rose 0.5 per cent.

The report added that household consumption fell 0.5 per cent, after inflation, to $612.5 million, as consumers spent less on eating out, motor vehicles and electricity consumption, compared to a year earlier.

A 3.2 per cent increase in government spending in the first quarter, largely due to pay rises for civil servants, was a positive contributor to GDP.

The island’s trade surplus in goods and services increased by 6.9 per cent, or $21.6 million, mainly due to a 9.8 per cent decrease in the value of imports, as less machinery and equipment was brought in.

Exports of services rose 1.8 per cent as earnings from the financial and travel services increased. However, the island spent 5.3 per cent more on services from overseas, with the increase due mostly to construction and engineering services, as well as business consultants.