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Employment income growing – especially in IB

Growth driver: international business provided the bulk of the island's employment income growth in the third quarter of last year

The total amount of wages and salaries earned in Bermuda in the third quarter of 2015 rose 3.4 per cent from the same period the year before, government statistics show.

More than four-fifths of the increase was attributable to one sector — international business.

Employment income in the July-through-September period of last year was $761.1 million, the Department of Statistics revealed this week, using data from the Tax Commissioner’s office.

That marked an increase of nearly $25 million from the same period last year. Employment income for the international business sector was $232.9 million, up $20.8 million, or nearly 10 per cent.

The data illustrate the importance of the sector to the island’s labour market and its resilience as an income generator despite a soft reinsurance market that has led to a wave of consolidation.

The business services sector provided $75.2 million in third-quarter employment income, up 3 per cent from a year earlier, while the banking, insurance and real estate segment generated $71.3 million, up about 0.2 per cent.

The wholesale and retail sector, which has been buoyed by a year-long uptick in retail sales, paid out $52.1 million in employment income in the third quarter, representing an increase of $1.7 million, or 3.4 per cent from the year before.

The public sector generated 13.7 per cent of all the employment income earned in the third quarter. The public administration and defence sector paid out $104 million to employees during the period, up nearly $1 million from a year earlier.

Hotels and restaurants paid out $44.5 million in wages and salaries over the three months, up 1.7 per cent from a year earlier.

The only sectors to see employment income declines were construction and transport and communication.

Construction workers took home a combined $26.4 million, down from $27.1 million a year earlier.

The construction industry appears to be somewhere near the bottom of a boom-and-bust cycle and recorded $17.6 million worth of work put in place during the third quarter, 4.1 per cent less than a year earlier.

During the first three quarters of last year, value of work put in place was $57.5 million — putting 2015 on course to be the weakest year for the industry in at least 14 years, according to the data.

The industry is suffering from a clampdown on government capital spending as well as falling private-sector demand. The prospect of a new hotel project breaking ground in St George’s this year may help the industry bounce back.

Transport and telecommunications trimmed its payroll by 4.4 per cent, down to $19.2 million in the third quarter of 2015, compared to $20.1 million in the same period of 2014.

Government cautioned that employment data for the third quarter is subject to later revisions to account for late returns.

The third-quarter data suggest an acceleration in employment-income growth. For the first three quarters of last year employment income totalled $2.4583 billion, up $37.86 million, or 1.6 per cent, compared to the first nine months of 2014.