WEDNESDAY, OCTOBER 26: GDP per capita down eight per cent isn’t the same as saying that new car sales have been cut in half since 2007. It seems that Bermuda’s car dealers are reporting the same sorry tale. These tales of woe are just another indicator of the true state of Bermuda’s economy.
Remember 2007? It was the last year of grandly rising GDP. In 2007, GDP hit $5,860.7 million. In 2008, GDP moved up 3.5 per cent and peaked at $6,067.9 million and, according to the Department of Statistics, GDP per capita hit Bermuda’s all-time high of $92,693.
Also in 2008, 40,213 people were filling jobs and apartments and condos and office space in Bermuda. And these people were still buying cars. More cars then, than now.
While that stuff is important to economists and should be important to governing politicians, it isn’t really of great interest to the car-buying man-in-the-street. What’s of supreme interest to him is whether or not he can aspire to that sleek BMW convertible; or afford that Suzuki Alto.
For many Bermudians, a fancy and expensive car was often their only symbol of financial success. A $60,000 SUV that was too wide and too powerful for Bermuda’s 140 narrow miles showed everybody that you had moolah. It didn’t matter that the buying process usually meant that you co-owned the SUV with one of the banks. Everybody knew that, but nobody talked about that.
Now, in 2011, with Bermuda actually going through its fifth consecutive year of significant private sector job losses; Bermuda and Bermudians are finally facing the realities of a down-turning economy.
Until this collective lament by Bermuda’s car dealers, many Bermudians — Government included — sought to either ignore or deny the daily turning down of Bermuda’s economy. Now, with the car dealers saying that car sales in 2011 are half what they were in 2007, everyone can see that there has been a change.
The Department of Statistic’s annual Employment briefs, have shown us that the number of filled jobs in Bermuda fell from 40,213 in 2008 to 38,097 in 2010. Although not yet reported, it is certain that job losses have continued into 2011 with fewer than 37,000 jobs now filled. This far into 2011, and unless the private sector can work a miracle, it is likely that job losses will continue into 2012, with the distinct possibility of getting down to only 36,000 filled jobs in 2012.
Bermuda’s whole national economy is taking the kind of big slam that the car dealers are finally admitting to. The big slamming has actually been going on since 2009, but there were sneaky signals in 2007 when Bermuda’s private sector began shrinking. However, in a Bermuda twist, 2007’s private sector job shrinkage was covered up by a massive Government sector job expansion as Government added hundreds of personnel taking its job count to its all-time high of 6,006 employees.
But in 2009, reality slammed, and slammed hard. In 2009, GDP dropped 5.8 per cent, going from $6,067.9 million to $5,715.3 million. Also, there was a drop in people filling jobs. Now, from car dealers, it seems that car sales also began to fall off.
However, following an old and now thoroughly outmoded habit, car dealers kept this fall-off as a ‘commercial secret’ and Government didn’t think it important enough to use the two signals (and there were others) as a general economic warning.
Now, with car sales down by 50 per cent, at least the car dealers are admitting that there is a general as well as a specific economic problem.
General problem? Bermuda’s economy is declining. GDP, at $92,693 per capita in 2008 is likely to end up 8 percent down at only $85,000 per capita in 2011. Heading lower in 2012.
But Government is not talking about the economy. Government is too busy planning an election and has little time and energy left over for national matters.
Specific problem? Us 27,000 (or thereabouts) Bermudians who are still filling jobs, are witnessing a steady exodus of the foreign intellectual capital that was employed, on this island, by International Business and its supporting infrastructure. A majority of the already departed 3,000 plus job-fillers were well-paid — car buying — guest workers.
Any Bermudian who still does not understand the link between key guest workers and himself should have a coffee and a chat with a car dealer. But bring your own coffee. The car dealer has fallen on hard times.