Imports fall for third year in a row as demand sinks
Imports fell for a third successive year in 2011, as the recession dampened demand for goods.
The value of goods brought in from overseas slumped by almost eight percent last year, following the nine percent fall in 2010.
Government figures released yesterday showed imports totalled $911 million, down by $78 million from $989 million in 2010.
There was no sign of an uptick in demand the fourth quarter, when imports totalled $219 million, down nine percent from the $241 million recorded in the same period in 2010.
The better news for the Island’s economy in the Balance of Payments figures was that receipts for services provided by Island companies to overseas entities increased in 2011. The increase to $1.428 billion from $1.405 billion in 2010 represented an increase of $23 million, or 1.6 percent.
The fall in imports boosted the Island’s current account surplus, representing its trading balance with the rest of the world. In the fourth quarter the surplus was $137 million, a decrease of $85 million from the $222 million recorded in the same period of 2010.
Goods imported from the US, the Island’s biggest trading partner, fell by $22 million during the October through December period, while goods imported from Canada rose by $2 million.
Imports of machinery recorded the largest decline, falling by $9 million. Other large spending decreases were recorded in the finished equipment and chemicals categories which declined by $6 million and $4 million, respectively.
There were declines in all major import commodity groupings except for food, beverages & tobacco and transport equipment which registered minimal gains. Revenue from exports fell to $3 million during the quarter.
The Balance of Payments data showed that receipts from services transactions stood at $322 million during the quarter. Among the services categories, revenue from business services transactions decreased $5 million. This was due partly to a $3 million decline in receipts by monetary and financial institutions.
Combined revenue from information communication technology services and other services both decreased $2 million.
In contrast, travel inflows grew $3 million on account of higher per-person expenditure by cruise ship passengers which offset a decline in spending by air arrivals. Revenue received from government services grew $6 million when compared to the fourth quarter of the previous year.
Payments for services received from non-residents totalled $237 million in the fourth quarter, $14 million below the level recorded in 2010.
Payments for other services, which include those provided by overseas head offices, fell by $13 million. Transportation outflows declined $4 million, as residents paid less for airline travel tickets. In contrast, resident expenditure on insurance services increased by $11 million during the quarter.
The surplus on the primary income account abated by $122 million Transactions on the primary income account realised a surplus of $302 million. This represented a 29 percent decline, mostly due to a rise in dividend payments to non- residents.
Residents earned only $26 million in income on overseas assets.
Resident employees in the international business sector received an estimated $6 million more in employee compensation than was earned in the fourth quarter of 2010. Payments by resident businesses to non-resident employees were $4 million less during the same period.
Receipts of other primary income, which includes production and income taxes by government, fell $7 million below receipts in 2010.
The financial account recorded a net inflow of $198 million. Financial account inflows more than doubled when compared to the record level in 2010, reflecting an increase in short-term liabilities to non-residents.