Construction helps GDP edge higher
Bermuda's economy grew for the third time in four years in 2018 according to annual gross domestic data.
The 0.1 per cent expansion of GDP after adjusting for inflation last year was achieved mainly thanks to growth in construction and international business.
This followed up the America's Cup-fuelled 3.6 per cent growth in 2017 — the only year over the past decade in which the island's real GDP growth topped 1 per cent.
Last year's expansion fell short of the 0.5 per cent to 1 per cent growth forecast by Ministry of Finance officials in February this year.
The construction and quarrying industry group was the largest contributor to growth in 2018, adding $33.9 million in real terms, fuelled by the major hotel and airport projects, as well as residential work.
International business, which generated more than a quarter of the island's GDP, grew by $24.7 million, driven mainly by insurance brokerages and re/insurance underwriting companies.
The sectors to see the largest falls in real dollar terms each suffered particularly from comparisons with the America's Cup year. Value added by the arts, entertainment and recreation industry fell $36.6 million, or 60 per cent, in 2018. This followed three successive years of double-digit increases, as the sector “reverted to levels comparable to 2014 which precedes the lead up to America's Cup activity starting in 2015”, the report stated.
The wholesale and retail sector experienced a $15.5 million, or 4.5 per cent fall in value added, contrasting its 3.1 per cent growth in 2017.
The figures, released on Friday in a report by the Department of Statistics, featured a change in the base year — from 2006 to 2013 — for reporting of GDP at constant prices, which focuses on real growth and strips out price inflation. The number of industry groupings in the report has also increased to 18 from 15. Past years were also revised.
The report said the changes would allow policymakers to “use a set of economic statistics that is more representative of the economic structure of Bermuda than those based on the 2006 base year” and would provide “a better understanding of which industries are driving growth”.
The rebasing exercise was completed with the help of the Caribbean Regional Technical Assistance Centre.
Bermuda's GDP in current prices, which includes inflation, increased 1.7 per cent in 2018 to $6.94 billion. International business accounted for $1.72 billion of that, while financial and insurance activities with $1.12 billion and real estate activities with $1.01 billion the next two biggest contributors.
Quarterly GDP figures released this year suggest that Bermuda is on track for stronger growth in 2019 than it achieved last year, with real GDP growth of 3.4 per cent recorded in the first quarter and 3.3 per cent in the second. Gross capital formation, driven by construction, has been the strongest growth area this year, according to the reports.