'Slump will drag on'

FRIDAY, JAN. 6: Brace yourselves for more tough times — the recession is going away no time soon.

The vast majority of islanders believe the slump will continue for at least the next two years.

And more than a third of the population say it will last between two and three years, according to the latest poll.

A Bermuda Omnibus Survey question, commissioned by the Bermuda Sun, reveals that just three per cent of islanders believe the recession will be over in less than a year.

Statistician Cordell Riley told us that the results of the poll tallied with the latest views of experts.

He said: “I have always said that we should not expect any relief until 2013 at the very earliest.

“There is no real good news in sight and there is a bumpy road ahead for the foreseeable future.

“All the economic trends are continuing to go down and this poll is probably a fair assessment of where we stand.

“I said in 2011 that people would be best placed if they prepared themselves for the recession to last between two and three years.

“This poll shows people are very well aware of the situation we find ourselves in and people are speaking from experience and a realistic perspective.”

The December 10-19 survey involved a sample of 400 islanders being asked how long they thought the recession would go on for. Twenty-nine per cent of those interviewed said they believed it would last between one and two years.

While 24 per cent of the population say it will last for three years or more.

The survey also revealed that residents in Hamilton, Smiths, and St George’s have the bleakest outlook, as they are most likely to expect the recession to last three or more years.

Residents of Sandys and Southampton are significantly more likely to believe the recession will last between two and three years compared to other parishes.

Craig Simmons, Economics Senior Lecturer at Bermuda College, said: “The overall population’s economic outlook tends to lag behind actual changes in economic indicators.

“In a best case scenario, the economic cycle will bottom out toward the end of this year.  The prospects for recovery are more elusive.

“Whilst the population is well aware of the deleterious effects of public debt, presently at $1 billion, the elephant in the room is the $5 billion in private debt racked up by households and businesses between 2004 and 2008.

Upbeat

Mr Simmons  told the Bermuda Sun he remained upbeat about our future.

He added: “Business or entrepreneurial opportunities are as plentiful today as at any time.

“Businesses able to provide value for money or satisfy untapped or unrecognized needs can do extremely well.

“Recessions give birth to many successful businesses: Apple, Microsoft and Krispy Crème doughnuts are cases in point.

“Recessions are also associated with improved physical health, a shift toward self-improvement and less expensive entertainments, fewer accidents and less congestion, as well as a return to the principles of prudence and thrift.

“What is lacking is the realization that that which made this country prosperous prior to the recession is still with us.

“Further, the demand for international business services is likely to grow as governments around the world try to extract additional tax dollars from their wealthier denizens to pay off sovereign debt run up during the recession.

“The future looks bright for offshore financial centres.”