Report shows fourth consecutive quarter of growth – The Royal Gazette

Updated: August 04, 2022 7:48 PM

Jason Hayward, Minister for Labor and the Economy (file photo)

Rebounding tourism and strong consumer spending are keeping Bermuda’s economy heading in the right direction, according to recently released first quarter figures.

But there were some negatives in the financial situation.

According to Jason Hayward, Minister for the Economy, the total number of business registrations fell by 0.8% with 266 new businesses registered, a drop of 17.1% from the previous year.

“Current economic trends hold promise for an environment that encourages economic growth while providing opportunity for Bermudians,” he said.

The report shows that after adjusting for inflation, real gross domestic product rose 3.9%, marking the fourth consecutive quarter of year-over-year economic growth.

The 2.7% increase in consumer spending in the first quarter compared to the previous year contributed to this trend.

Employment income for the first quarter was 6.2% higher than the 2021 level. Sectors such as hotels and restaurants, transport, communications and international trade saw strong growth in the remuneration of employees.

Tourist arrivals and spending increased as Bermuda reopened for leisure and business visitors.

The island welcomed 12,280 air visitors during this period, compared to 3,423 in the first quarter of 2021. This sector saw a $17 million (306.4%) improvement in air visitor spending compared to the ‘last year. Additionally, hotel gross revenue for the first quarter was $39 million (198.1%) above 2021 levels.

Mr Hayward said government consumption rose 2.3 per cent, with increased spending on materials, supplies and insurance payments.

Despite the overall upward growth, business investment in capital goods contracted 2.4%, mainly due to a reduction in imports of machinery and equipment such as furniture and motor vehicles and the decline in the value of construction year over year.

Bermuda’s trade in goods and services with non-residents generated a surplus of $334 million for the first quarter of 2022, up $34 million from a year ago.

Bermuda has increased its foreign exchange earnings through service exports primarily related to transactions in business, accounting and insurance services.

Some of this growth was tempered by imports, such as fuel, and increased payments for services, such as passenger air transport and freight transport services.

At the end of the first quarter, the value of Bermuda residents’ stock of foreign assets was greater than its stock of foreign liabilities. Bermuda’s stock of external assets exceeded its stock of external liabilities by $6.1 billion, the net international investment position increased by $1.4 billion during the fourth quarter of 2021.

Mr. Hayward said that while the overall economic performance is good news, Bermuda must continue to work together to sustain economic growth and increase the number of jobs available.

“To that end, I am also pleased to report that further progress has been made on the economic recovery plan,” he said. “As many know, the Bermuda ERP aims to create jobs, increase GDP and, combined with other measures, move us towards a sustainable future.

“The 31 policy initiatives under the ERP are prioritized to focus on areas with the greatest impact on Bermuda’s medium-term economic growth and employment.”

The four main initiatives under the ER-Program include Tyne’s Bay Infrastructure Rehabilitation, Northeast Hamilton Downtown Development; development of a casino industry; and the development of vertical farming.

Hayward said detailed action plans for each of the four priority initiatives were completed in April and stakeholders continued the work needed to move these initiatives forward.

To implement the 31 initiatives under the ERP umbrella, the government launched a dedicated project management office on June 1. The PMO’s responsibilities include oversight, monitoring and assistance as needed while focusing on the four main policy initiatives.

“While this is good news, I must stress that the government is not just working on ERP implementation,” Mr. Hayward said. “In support of the government’s economic development strategy, other entities are responsible for delivering critical components.