Figure 1: Jersey GNI per capita in 2006 (PPP US$) Source: States of Jersey Statistics Unit
downturns elsewhere in the global economy coinciding with that in the financial services industry. As figure 2 shows, the economy stabilized in 2004 and returned to real growth in 2005 - the growth being broad-based with both the finance and non-finance sectors contributing significantly. Real GVA grew sharply in 2006, with the finance sector contributing the most, reporting profit increases of over 20 per cent in real terms for the year.
Data collected
Figure 2: The economy saw strong economic growth in 2006 - per cent change in GVA constant prices. Source: States of Jersey Statistics Unit.
Figure 3: Profit expectations (weighted by manpower) Source: States of Jersey Statistics Unit.
from financial institutions last year showed that profit expectations continued to be very optimistic with more than 80 per cent of them (Figure 3) expecting profits to rise in 2007. However, with the sub prime market events in the U.S. and the effects of the credit crunch on the world economy since then, we know there is much more uncertainty looking to the future, despite Jersey's areas of financial services speciality likely to being only minimally impacted.
Figure 4: Performance of non-finance sectors - (GVA constant prices, 2000=100) Source: States of Jersey Statistics Unit.
12 The Parliamentarian 2008/Issue One - Jersey
Support from the rest of the economy Outside financial services, some
sectors have been more successful than others. The "Other business activities" sector
including architects, cleaning services, advertising, security and personal services has been the most successful, increasing in real terms by about 25 per cent since 2000. Ten per cent of this growth was in
2005 alone, reflecting a high degree of interdependence with financial services and being responsible for much of the non-financial sector growth performance. Another key contributor to growth has
been the construction industry. Generally, the construction industry's performance is more volatile than other industries reflecting its cyclical nature. Indications are that the levels of activity in 2006 continued through 2007 and into this year, as large-scale development gets underway on the St Helier Waterfront. Wholesale and retail activity picked up
recently, reversing small falls in previous years, with the sector benefiting from growth in fulfilment activity and higher disposable incomes resulting from the improved performance across the economy. The hotels, restaurants and bars
sector saw some growth in 2006 after declines in recent years at a rate of about three per cent a year. Tourist numbers have stabilized,
though tourists are typically staying in Jersey for shorter periods of time. By the end of 2007, the number of arrivals to Jersey by air and sea had increased by about 4.5 per cent on the previous year, reaching the 1,000,000 figure, helped by growth in the conference and business visitor market. There are positive signs of optimism for the future with some significant hotel investment projects recently completed and more planned in the next few years. Agriculture is another sector that did
not perform so well after 2000 - its GVA declined by almost 20 per cent up to 2004 during a period of significant restructuring.
Subsequently, there has been some
slight growth reflecting a new approach to the rural economy. While the sector only makes up a
small proportion (1.4 per cent) of Jersey's GVA, it is nonetheless an important part of the social and environmental fabric of the island, widely know internationally for the Jersey cow and Jersey Royal potato.