GDP report: international business powers island’s economy
Bermuda’s international business sector accounted for almost a third of the island’s gross domestic product last year, the economy minister said today.
Outlining the 2023 GDP report, Jason Hayward said Bermuda’s economy grew by 4.9 per cent in real terms to $7 billion last year, marking the third consecutive year of economic expansion.
Mr Hayward said: “Overall, based on the annual GDP report on economic activity for 2023, Bermuda’s economy is doing well, but we will not rest.
“The Government is encouraged by the solid economic performance of the local economy and we will continue to facilitate Bermuda’s economic expansion by creating a business ecosystem that allows businesses to thrive.”
The report showed that Bermuda’s economic growth was led by international business, which grew by $117.2 million.
“This industry, which had an historic 4,927 filled jobs in 2023, was the largest contributor to the GDP at 29 per cent of total GDP,” said Mr Hayward.
In 2018, IB was responsible for 25.1 per cent of GDP and asked if the growth was a mixed blessing for Bermuda, given issues such as the sector’s high salaries, the minister insisted: “The growth in international business is positive.
“What we see actually taking place in international business is also diversification within the sector.
“You see an increase in brokerage services and you see an increase in long-term reinsurance, so the industry itself is diversifying, which is extremely positive.
“The number of jobs it’s created is also a positive for our economy.”
On whether the growth in IB meant less economic diversification, Mr Hayward added: “I wouldn’t say we are less diverse as an economy as a whole.
“I think what is important is that we continue to have an international business sector that continues to grow and expand. That's positive.
“But what we also recognise in the Government’s economic development strategy is that there are opportunities in other industrial sectors and these are the sectors that we need to place more focus on.
“It is not positive for our agriculture and our fishing sector to be contracting, so it is areas like the blue economy and our green economy sectors that we have to work on.”
The 2023 report showed that the second biggest growth area was in the financial and insurance activities which saw an increase of $72.9 million, due mainly to a rise in the activities of holding companies.
Accommodation and food services rounded out the ‘top three’ industries with the largest growth in absolute terms, rising by $53.6 million.
The fourth largest contributor to growth was professional, scientific and technical activities, which accounted for an increase of $29.4 million in 2023.
The industry that recorded the largest decline in activity was the construction and quarrying industry, which fell by $12.1 million with the decrease mainly attributed to overall reductions in construction projects.
Overall, economic activity increased for 14 of the 19 industrial groups year-to-year, contributing to the real GDP growth, with 10 sectors exceeding 2019 pre-pandemic levels, said the minister.
Growing:
• Transportation and storage activities grew by $11.4 million
• Wholesale and retail trade increased by $10.7 million due to strong retail trade activities
• Information and communication services gained in value added by $10.4 million, driven mainly by growth in publishing services and telecommunications
• Education activities rose by $7.6 million
• Administrative and support services increased by $6.3 million
• Real estate activities recorded an increase of $5.8 million
• Arts, entertainment and recreation activities rose by $5.4 million
• Manufacturing increased by $4.6 million, reflecting increases in activities related to furniture and textiles, wearing apparel, leather and leather products
• Other service activities rose by $2.9 million, which includes funeral and related activities, hairdressing and beauty treatment and personal care services
• Human health and social work activities increased in value added by $2.3 million in 2023.
Contracting:
• Agriculture, forestry and fishing decreased by 10.9 per cent in 2023, or $1.8 million. The decrease was attributed primarily to a fall in animal farming and fishing activities
• Electricity, water supply and waste management activities saw a decrease of 6.1 per cent, or $6.1 million
• Public administration declined by 0.5 per cent or $1.7 million due mostly to lower expenditure on professional services.
• Value added for activities as households as employers fell 4.2 per cent or $0.5 million.
Mr Hayward added: “This growth exceeds the Ministry of Finance’s estimate, outlined in the 2023 National Economic Report of Bermuda, which estimated the economy may have grown between 4 per cent and 4.5 per cent in 2023.
“While our 2023 quarterly GDP figures clearly indicated our economy was on track to meet those estimates, it is immensely satisfying to report this notable economic achievement to the country.
“The data indicates that in 2023 Bermuda had one of the fastest growing economies in the Latin American and Caribbean region.”
• To read the full report, see Related Media
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