Economy: one step forward, two steps back?

Monday 12 October 2015

Following news the Island's economy grew in 2014 for the first time since the recession, the two latest sets of business health stats make tougher reading.

Business activity indicators over the last three months, particularly in the crucial financial services sector, fell significantly from the strong levels seen in the last six months, with some recording their lowest levels for two years.

However, Construction led the charge for the 'non-finance' sectors, having one of its best quarters to date, mainly in terms of increased employment levels, and the amount of business firms expect to have in the future. In fact, business activity was actually reported to be stronger in the non-finance sectors, when compared to finance, for the first time in the last six years.

Similarly, in terms of optimism for the future, 42% of construction firms were more positive compared to the previous quarter, followed by 25% of wholesale/retail businesses, and just 18% of those in Finance - overall, this measure was at its lowest for a year. 

The business activity indicator, produced by the States Statistics Unit, is a measure of the total amount of work being done by all businesses operating in Jersey. For the third quarter of this year it showed...

• ...the lowest level in Finance for more than two years;
• ...the lowest level for all sectors since last December;
• ...27% of non-finance firms reporting higher levels of activity. 

While only being the results from one quarter, those statistics might support predictions that economic growth generally in 2015 will be weaker than in 2014, when recent statistics showed that the value of Jersey’s economy rose 5% to £3.9 billion last year – that figure may be a long way off the 2001 peak, but it shows the first annual improvement since the crash of 2008.

Meanwhile, the number of people looking for work in Jersey also increased last month by 130, which was 110 people higher than the average for the last three months. The Statistics Unit put this down to recent changes in the Income Support criteria though, which they say will make this number higher than usual. In total there were 1,540 people registered as looking for work in September, 79% of them being of British/Jersey nationality. That's compared to 2,050, which was the highest level recorded to date, in March 2013. 

That number only includes those registered as looking for work - the actual number of unemployed people in Jersey is thought to be closer to 2,800 (June 2014).