HAMILTON, Bermuda, Thursday February 26, 2015, CMC – Financial analysts believe Bermuda is likely to emerge from six years of recession this year, despite rising unemployment in 2014.
Ministry of Finance analysts’ projections estimate the economy will grow by up to 1.5 per cent next year.
More than 6,500 jobs — including 790 last year — have been lost since 2008.
In the outlook section of The National Economic Report of Bermuda 2014, the ministry pins its hopes of growth on hotel developments, the broad impact of the 2017 America’s Cup, a prestigious sailing event the island is to host, and the efforts of the Bermuda Tourism Authority and the Bermuda Business Development Agency to bring visitors and international business to the island.
Gross domestic product figures are not available for 2014, but the ministry estimates that the economy contracted by between zero and 1.5 per cent last year.
The report quotes preliminary data from the 2014 Employment Survey, which shows the 790 jobs lost last year represented a 2.3 per cent fall in the number of jobs.
“Throughout the current recession, the loss of jobs in the economy is one of the chief contributing factors preventing economic recovery,” the report states. “The island has lost 6,726 jobs since 2008 when employment levels were at their peak of 40,213.
“The 33,487 jobs recorded in 2014 were 16.7 per cent less than the 2008 figures.”
Bucking the trend last year was the international business sector, which added 161 jobs for a total of 3,929 jobs, representing a 4.3 per cent increase over 2013.
Bermuda lost 221 construction jobs last year — continuing a downward trend that the report expects to be reversed this year — leaving the industry with 1,922 jobs, 10.3 per cent fewer than in 2013.
The financial intermediation sector, which includes the banking industry, shed 301 jobs, representing a 12.1 per cent decline. The business services segment had 106 fewer positions.
The unemployment rate rose to nine per cent in 2014 from seven per cent in 2013.
“The lower levels of employment and the corresponding loss of expatriate workers who leave the Island when their employment is terminated will continue to weigh heavily on household consumption and retail sales,” the report added.
The selection of Bermuda as host nation for the 2017 America’s Cup is described as “one of the most significant economically beneficial events in the history of Bermuda”, benefiting the economy from an additional $250 million of spending over three years.
New jobs and investment starting this year and during the run-up to the event represent “a major stimulus”, the report added.
Bermuda’s national debt has topped US$2 billion, up from $1.4 billion the One Bermuda Alliance government inherited after it defeated the Progressive Labour Party in the December 2012 general election.
Finance Minister Bob Richards last weekend presented a near one billion US dollar national budget that included planned spending cuts of US$33.1 million and increased taxes.