Lovin' these signs of economic recovery

It’s no longer just a romantic wish —  Bermuda just might be on the road to economic recovery. 

“The recovery is within our grasp,” says economics lecturer Craig Simmons.

On this Valentine’s Day, he cites three heart-warming indicators: retail sales, labour force statistics and the island’s balance of payments.

Another positive sign came yesterday when Appleby announced that the fourth quarter of 2013 saw Bermuda at the centre of  $15.3 billion in offshore deals — double the amount from the same period in 2012. 

Then there are the more abstract but perhaps equally encouraging signs of renewed optimism: the Hamilton Princess
bringing in a world-famous celebrity chef (see page 25) and the buzz around development of a new resort on the Club Med site. 

Today we also report on what would be a huge shot-in-the-arm for Dockyard, with would-be developers lining up to invest in ideas that include a hotel and an entertainment complex (see page 4).

While the recession is still very much a reality for many Bermudians and businesses, there appears to be a steadily-growing number of signs of hope.  

Mr Simmons says that if Bermuda continues on its present course, the island could see recovery in 2015.

He cites three macroeconomic indicators, the first being the Retail Sales Index for November.

“It hasn’t actually shown the improvement that I would have hoped for, but it is getting less bad than it was a year or two ago. We’re not going down as fast as we used to. I take that to mean that the recovery is just around the corner as it relates to retail sales.”

He said a sign the recession is over would be three consecutive months of retail sales growth by volume.

November was up by 3.7 per cent in volume while December was down by 3.4 per cent in volume.

Mr Simmons said a second positive sign was the Labour Force Survey 2013.

“There was good news in terms of Bermudian employment.” The number of jobs held by Bermudians was up 29 positions.

“Things are getting less bad on the employment front and that should affect the real economy.”

The Labour Force Survey also reported the economy grew 115 jobs in 2013 and unemployment fell from eight per cent to seven per cent.

Mr Simmons said the third sign was the current account on the balance of payments.

“It measures our foreign currency position. In terms of our next exports, we’re still earning more than a billion dollars on exports than we’re spending on imports of merchandise, overseas travel, education and so on.

“Based on those three macroeconomic indicators, the recovery is within our grasp, whereas two years ago we had to go through the downturn. We are past that point and if we maintain the course that we’re on right now, we could be looking at a full-fledged recovery in 2015.”

Another positive sign was received yesterday when Appleby announced that the fourth quarter of 2013 saw double the value of offshore deals from 2012. 

Bermuda’s strong fourth quarter resulted in 116 deals with a combined worth of USD15.3bn, taking the jurisdiction’s Q4 value up 132 per cent on the previous quarter, and volume up 26 per cent. When compared to Q4 2012, the value of Bermuda’s transactions was up 51 per cent.

Bermuda was also home to the biggest offshore deal in the fourth quarter of 2013 with acquisition of CSL New World Mobility, a telecoms group, by HKT of the Cayman Islands for $2.4bn. 

What do you think? Are we close to economic recovery? Comment below or e-mail deputy editor Don Burgess: [email protected]