Making sense of statistics

It has been said that if all the world’s economists died tomorrow, we could predict exactly what the consequences would be because there would be none. That, however, is unfair to the experts who pore over very real data ranging from employment figures to trends in the Retail Price Index and then try to make sense of what the economic future holds. Jersey has such experts, and although we cannot expect them to be spot on every time, their work is of great value.

The relevant Island data is collected and subject to initial analysis by the States Statistics Unit. This material is, in many cases, subject to further analysis by our economic advisers, who try to chart the Island’s economic prospects using sophisticated models and the shrewdness which comes only with experience.

Recently, such analysis has begun to provid the Island with a forecast of the economic conditions likely to obtain in the next couple of years. It has also painted a picture of how inflation is expected to wax and wane over a similar period.

If these forecasts prove to be close to the way in which real-world events pan out, the outlook is far less bleak than pessimists might imagine. Inflation will almost certainly rise in the short term, not least because of the one-off effect of the rise in GST, and the Island will still struggle to shake off the effects of the global recession, but there are signs of resurgence.

The financial service sector is, unsurprisingly, in the van of the recovery. In recent business confidence surveys it has reported that increased profits and higher rates of job creation are anticipated. It is, in a nutshell, poised to capitalise on the widely forecast global recovery.

Other sectors are reported to be more cautious, having been severely mauled by the downturn of the past few years, but it is likely that industries such as retailing or construction lack the wider perspective of those operating internationally. It is also likely that, as the forecasters suggest, these other businesses will be hauled up by finance, the force which continues to shape the core nature of the Jersey economy.