Hayward: economic growth stalled in second-quarter 2025
The island’s economic expansion hit a wall during the second quarter of last year, hindered by a reduced trade balance owing to an increase in imports, the Minister of Economy and Labour announced.
Jason Hayward said statistics from the Second Quarter GDP 2025 report showed that the contraction was also driven by cuts in government spending.
Mr Hayward said figures showed the economy shrank by an estimated 1.2 per cent year-over-year after adjusting for inflation.
In the previous quarter, the economy grew by only 0.9 per cent in real terms.
He added: “The Government will continue to execute the strategic initiatives outlined in Bermuda’s Economic Development Strategy to ensure that Bermuda experiences sustainable economic growth and development.”
Mr Hayward highlighted that the island’s economic trade balance declined by 7.1 per cent to $417.9 million during the reporting period, as growth in payments from imports of goods and services “outpaced” the growth of receipts for exports.
Exports of goods and services fell 0.9 per cent during the second quarter, while imports of good and services rose 4.8 per cent.
The number of firms on the local business register rose to 4,048 — a 2.3 per cent increase over the previous year — as 32 new businesses were registered in the domestic economy.
Jason Hayward, the Minister of Economy and Labour, asserted that the Government was working to ensure that in the short term, suitably qualified Bermudians got a fair shot at work in the Fairmont Southampton.
A hospitality sub-committee under the Workforce Development Advisory Board is looking at training and development initiatives in the short and long term, he added.
“We are working on some of those measures now,” he said.
“We are having ongoing conversations with the hotel industry and representatives of the hotel regarding restricted job categories and the tightness of the labour market.”
He said “meaningful conversations” are being held with the Bermuda College on the continuation of hospitality training and development.
The reopening of the iconic resort will be “extremely significant” to Bermuda’s economy, Mr Hayward said.
He said the tourism sector’s overall contribution to the island’s economy is less than 5 per cent.
In the past, he said, the figure was much higher when the hotel was operational.
Besides tourism, Mr Hayward said industries, such as those within the wholesale and retail sectors, will benefit from the hotel’s reopening through the provision of goods and services.
He said the island will also benefit indirectly from the wages and salaries of employees.
Mr Hayward said consumer spending was recorded at $841 million while household consumption increased 1 per cent over the previous year.
He said household consumption of services crept up by 0.1 per cent through higher expenditure on personal care and air transport services.
Bermuda hosted 67,687 air visitors during the second quarter of last year, up from 67,121 recorded the previous year.
Mr Hayward said employment income during the period was recorded at 6.4 per cent above the previous year’s level.
Jason Hayward, the Minister of Economy and Labour, said the Government will monitor labour market trends to determine what measures are needed to safeguard jobs from the impact of artificial intelligence and automation.
“As it pertains to digitisation and automation, the Government is mindful that our population is ageing,” he added.
“Where we find that it may become a risk to our economy, we will put measures in place to prevent the automation of some areas.
“We don’t want to shift everything to digitisation and then we have an economy that our seniors cannot function in.”
His response came as the International Labour Organisation warned in a labour market report that global youth unemployment climbed to 12.4 per cent in 2025, with about 260 million young people not in education, employment or training.
The ILO warned that artificial intelligence and automation could exacerbate challenges, particularly for educated youth in high-income countries seeking their first job in high-skill occupations.
“While the full impact of AI on youth employment remains uncertain, its potential magnitude warrants close monitoring,” the report noted.
Mr Hayward said youth unemployment in Bermuda stood under 4 per cent, an improvement from more than 30 per cent after the pandemic.
He said a report from a 2025 employment survey was being compiled and will provide an overview of the latest estimates on the labour force.
Increases were logged at 19.9 per cent in the public administration sector, 8.2 per cent in the international business sector, 5.5 per cent in construction, 4.8 per cent in the hotel and restaurant industry, and 2.4 per cent in the business services sector.
Mr Hayward said the increase in the public administration sector came about through salary uplifts for public officers.
Government consumption dropped 3.8 per cent during the second quarter last year as declines in expenditure of goods and services “more than offset increased spending on wages and salaries”, Mr Hayward said.
He said investment rose 5.1 per cent to $222 million, while gross capital formation of machinery and equipment as well as construction increased by 5.1 per cent.
Investment in machinery and equipment increased as a result of higher imports of agricultural and industrial machinery.
• To read the GDP report, see Related Media
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