Economy remains on course to grow 3-4%

Chief Minister Allan Bell MHK

Chief Minister Allan Bell MHK

The Isle of Man economy remains on course for a real growth rate of 3 to 4 per cent in the current financial year, the Government’s latest quarterly economic report indicates.

The report, produced for the Council of Ministers by the Treasury’s economic affairs division, covers the three months to the end of September.

It indicates the economy’s performance is being achieved thanks to ‘an ever-widening number of sources’.

The figure compares favourably with the UK, where chancellor George Osborne announced last week the economy is forecast to grow 1.4 per cent this year and 2.4 per cent next year.

The report states: ‘Projections are that the Isle of Man ratio of Government gross spending to GDP will have fallen from 24.8 per cent in 2010-11 to around 22 per cent in the current fiscal year.

‘This augurs well for the future sustainability of the economy and the island’s public finances.’

The report indicates a two-speed local economy.

Export businesses and those with an international outlook are faring particularly well and are continuing to provide good job opportunities.

But sectors relying on domestic demand, such as construction, leisure and retailing are experiencing a difficult time with trading conditions ‘as tough as they have ever been’ over the past three decades.

One of the fastest growing sectors is shown to be e-Gaming.

The number of licence holders is up by 20 per cent on last year, and 80 jobs have been created during the first half of 2013.

It compares with the construction industry, which it says continues to be highly competitive as contractors compete for a reduced number of projects.

The report states: ‘The lack of construction activity is reflected in quarry output.

‘Outputs are at a 12-year low and 2012 output stood at only 41 per cent of 2001’s quarry output.

The report says the evidence points to a ‘reasonable year’ for the tourism sector: ‘Several major hotels have reported that revenue is in line with last year, which in turn was up on 2011.

‘Occupancy rates are down 2-4 per cent but room rates are up by the same level as hotels have seen a rise in higher-value tourists and business visitors.’

Mr Bell said the policy of diversification has protected the island ‘from the effects of the recent global economic downturn and is now reducing any over-dependence on public spending, which is an important consideration when Government is looking to make significant savings’.

He added: ‘Developing the economy remains central to my vision for the Isle of Man and we will continue to work closely with all areas of the business community to create the right environment for further growth.’




Back to the top of the page