Statistics Jersey’s latest Measuring Jersey’s Economy report indicated that last year the Gross Value Added – total economic output – of the Island was £4.381 billion, which in real terms was an increase of 0.4 per cent on the previous year.
Growth was achieved in a number of sectors, in particular construction which saw GVA increase by 9 per cent, while transport, storage and communication grew by 4 per cent, and the utilities sector by 3 per cent,.
But financial services, which makes up 40 per cent of Jersey’s economy, and hospitality dropped by two per cent, while the Island’s relatively small manufacturing sector saw a three per cent decrease.
GVA is calculated by adding the values of goods and services produced within the economy.
In 2017, across all sectors, productivity – the GVA per worker – was £68,000 and was highest in financial services where it was £136,000, which was almost three times higher than the average of the other sectors.
The report said that productivity in Jersey had fallen by almost a quarter since its high point in 2007, prior to the global financial crisis.
It added that financial services was hit hard by the drop in interest rates after the crash, while the increasing number of workers in other industries had recently led to their productivity declining.
‘This decline in the productivity of the Island’s economy overall has been driven by a decline in the productivity of the financial services sector,’ it said.
‘Increased levels of employment in lower productivity sectors has also been a factor in recent years.’
The report also indicated that the ‘economic standard of living’ in Jersey, calculated by gross domestic product per resident, is 25 per cent higher than in the UK but a fifth lower than in Guernsey.
GDP [calculated by GVA plus taxes on products and minus subsidies] per person living in Jersey last year was £40,790 compared to £30,900 in the UK and £49,040 in Guernsey.
The report said that Jersey had struggled to grow its GDP per person in recent years, while the UK and Guernsey had been successful in achieving this.
‘In 2017, GDP per head in Jersey decreased by almost 1 per cent, in real-terms. In contrast, both Guernsey and the UK saw an increase in GDP per head in 2017 of 2 and 1 per cent, respectively,’ the report says.
‘Since 2012 GDP per head of population has increased in real terms by 2 per cent in Jersey, by 8 per cent in Guernsey and by 7 per cent in the UK. Over the latest two years, since 2015, GDP per head has decreased in Jersey (down 2 per cent) and has increased in both Guernsey (up 5 per cent) and the UK (up 2 per cent).’
Economic Development Minister Lyndon Farnham pointed out that the economy had grown for the fourth consecutive year, however, which he said was ‘good news’.
‘Much of the economy performed strongly in 2017, in particular the construction sector and trust and company administration,’ he said.
‘However, the overall GVA figure was pulled down significantly by a fall in profits by banks with a relatively small footprint in Jersey.’
He added that improving productivity was ‘at the heart’ of the new Common Strategy Policy and investment in the tech sector would help achieve this.
‘We continue to make significant investment into the digital economy, including the recent investment into a new Internet of Things Lab and ongoing support for Digital Jersey’s development of the sector,’ he said.
‘We will address the productivity challenge. The reason why we are focussed on productivity is that it means we can build a vibrant and sustainable economy.’
