TCI poised for economic rebound
The growth spurt is being fuelled by a recovery in the TCI's tourism and construction sectors with spillovers into the wholesale and retail sectors.
In contrast, the latest projections by the Bermuda Government are for flat to negative 0.75 percent GDP in 2013.
It could be worse, according to ratings agency Fitch, which estimates we are likely to see an official contraction of 2.3 percent in 2012 and another 1.0 percent contraction this year.
The TCI government cautioned yesterday that actual growth will depend on the recovery of the US economy and the government's ability to diversify.
Last year, the territory's economy declined by 2.1 percent, or a total of $540.6 million in 2012.
The projection for this year's GDP is around $558.9 million.
So what is causing the economic rebound in TCI?
The government there said construction was projected to increase in the last quarter of this year, followed by a “surge” in 2014, as tourism projects like the West Caicos project, Third Turtle Club and new JW Marriott hotel and casino get underway.
As well, TCI is seeing the revitalisation of stalled projects and other proposed private sector projects, complemented by significant public sector spending on capital works, which is expected to include a number of road works throughout the Turks and Caicos Islands; the continued expansion of the airport and the building of various classroom blocks around the islands among other government projects.
Mr. Shirlen Forbes, TCI chief statistician, said the Hotel and Restaurants which accounts for the largest portion of the Gross Domestic Product (GDP) is expected to grow by 2 percent in 2013.
This just about makes up for the 3.5 percent decline in the tourism sector in 2012.
Bermuda has not seen a similar surge in hotel development, one business leader says, because: “Major hotels in Bermuda operate at a loss except the Fairmont Hamilton due to high operating costs and low volumes.
“No new hotel investments will be forthcoming until the current hotels break even.
“This requires the marketing effort to deliver results; hence the abolition of the Department of Tourism. This has not happened yet and so no surprise that shovels are not yet in the ground in Bermuda.”
A financial analyst added: “Bermuda still appears to be shedding jobs and having net emigration (i.e. workers leaving the Island). Plus we do not have any large foreign direct investment projects like a new hotel slated for this year.
“TCI may also have had a big rebound in tourism while Bermuda is actually posting very low air arrival figures over the trailing 12 months ...”