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Financial services sector continues to decline

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THE long-term decline in Jersey’s financial services sector continued last year with the industry’s contribution to the economy almost a third smaller than it was a decade ago.

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Latest figures produced by Statistics Jersey showed that the Gross Value Added – economic output – of the Island’s most important industry declined by two per cent last year in real terms, taking into account inflation. It follows a similar level of decline in 2016 and a more than 30 per cent fall in real terms output since 2007.

GVA is calculated by adding up the values of goods and services produced by firms.

The report says that last year’s decline was again driven by the dwindling fortunes of the Island’s banking sector, which is the largest sub-sector of finance accounting for about half of its economic output.

Banking saw a five per cent decline in its GVA last year, following a six per cent decline in 2016. The sub-sector’s GVA, taking into account inflation, is now roughly half of what it was before the global crash in 2007.

The legal sub-sector also performed poorly during 2017, slumping by ten per cent. There was better news in the trust and company administration and accountancy fields where GVA climbed by five per cent and 11 per cent respectively.

Productivity – the average GVA per worker – slumped by three per cent in real terms last year in finance, with all of the sub-sectors declining except accountancy, which improved by three per cent.

Despite the generally negative trends, the average amount of bonuses paid to finance workers increased by 12 per cent to £6,500 in 2017.

The average amount spent on each employee, including wages, social security and benefits, also increased to £70,000, which was nine per cent higher than the year before.

Meanwhile, the number of local staff recruited directly from school and university fell from the equivalent of 320 full-time employees in 2016 to 250 in 2017.

Ian Heath

By Ian Heath
author

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