Bermuda’s GDP back above $6bn

Bermuda’s GDP back above $6bn

Jonathan Kent, Business Editor

DOWNTOWN BERMUDA IN THE WEST INDIES

Bermuda’s gross domestic product — a measure of economic activity — climbed above $6 billion last year for the first time since 2008.

While nominal GDP rose by 3.4 per cent, figures released by the Department of Statistics today showed that after economy-wide inflation was stripped out, real GDP fell 0.1 per cent.

The construction industry recorded the largest gain in value added of $13.2 million.

Sectors that saw the largest declines in real terms were financial intermediation — mainly banking — and international business industries which decreased by $35.1 million and $28.6 million, respectively.

International business activity, which represented 26.3 per cent of the economy, remained by far the largest contributor to GDP, despite its value added falling by 2.3 per cent to $1.68 billion.

The statement said the decrease was mainly due to a decline in output in insurance underwriting and reinsurance services. But firms offering insurance management, actuarial services and pension consultancy recorded higher output.

The construction and quarrying sector delivered an 8.3 per cent increase in output to $211 million, its largest contribution to the economy in dollar terms since 2011.

The report attributed the increase in construction activity to work associated with the America’s Cup and renovations at the Hamilton Princess.

The real estate and renting industry made up 17.5 per cent of the economy and was the second largest contributor to GDP, with activity valued at just over $1 billion.

Financial intermediation generated $733.5 million of GDP, as the third biggest sector, while business activities, with $563.4 million and education, health and social work, with $505 million, followed.

Public administration’s contribution fell to $319 million, its lowest level in dollar terms since 2008, thanks to a decline in government spending.

Hotels saw an $11.1 million, or 10.5 per cent, improvement over 2015, as room and food sales rose, but restaurants saw their GDP contribution fall by nearly 4 per cent.

The island’s total GDP was $6.13 billion, up from $5.92 billion in 2015.