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Hurricanes and newspaper’s closure hit GDP

By the numbers: International business is the main contributor to Bermuda’s gross domestic product, accounting for 27.1 per cent of the total last year. The Island’s GDP decrease 0.4 per cent in real terms last year, the lowest rate of decrease recorded during the past five years. Measured with inflation, GDP was 0.2 per cent higher in 2014 than in 2013

Back-to-back hurricanes and the closure of the Bermuda Sun newspaper were among factors that impacted the Island’s gross domestic product in 2014.

Bermuda’s GDP fell 0.4 per cent in real terms last year, final estimates show. While still in negative territory, it was the smallest recorded decrease in GDP during the past five years.

If measured with inflation, GDP grew 0.2 per cent year-on-year, and that translated into a 0.5 per cent increase in GDP per capita, which stood at $91,478 at the beginning of the year.

In dollar terms, GDP was relatively unchanged at $4.6 billion, when adjusted for inflation. In current prices it was measured at $5.7 billion

The figures were released by the Bermuda Government Department of Statistics, which also provided a breakdown of the economic activity as measured in 14 sectors.

Hurricanes Fay and Gonzalo, which hit the Island last October, caused crop losses that, together with a decrease in the number of fish caught, lowered the value of the agriculture, forestry and fishing sector by 11.6 per cent.

Manufacturing declined 9.6 per cent, and this was primarily due to a decline in publishing activities. The twice-weekly Bermuda Sun newspaper ceased publication at the end of July 2014

It was a mixed bag for the hotel and restaurant sector, with restaurants recording a 7.2 per cent increase in activity, while hotels had a 4 per cent decrease, which was impacted by a drop in air arrivals.

Renovation work at the Hamilton Princess Hotel and improvement to docking facilities in Dockyard helped the construction and quarrying industry to a marginal 0.6 per cent improvement in its GDP value.

A 4.5 per cent decrease in telephone, telegraph and telex communications played a big part in the 3.7 per cent drop in the value of the transport and communications sector.

The economy’s two biggest sectors in terms of contributions to GDP are international business, which accounts for 27.1 per cent of the total, and real estate and renting activity, which accounts for 17.2 per cent.

International business was up 0.2 per cent last year, helped mostly by a 27 per cent increase in the value generated by businesses offering financial and related services.

Real estate and renting increased 1.9 per cent in value, with the uptick mostly attributed to an increase in condominium sales.

GDP for the first quarter of this year was 3.7 per cent higher year-on-year, a 2.1 per cent improvement in real terms when adjusted for inflation.

• See Related Media for GDP 2014 publication document.