Island’s economy grows for sixth year in a row

The figures come from the latest Economic and Financial Stability Overview, which brings together all the available statistics to look at the state of the Guernsey economy.

The report highlights that the housing market has stabilised and the workforce is slowly expanding.

Policy & Resources president Gavin St Pier welcomed the good news.

‘There are a lot of positive signs for our economy and, particularly, the growth in GDP and growth in islanders’ earnings are very welcome,’ he said.

‘The small increase in our population size as a result of people moving to the island, and fewer people leaving, is also a good sign and reflects the attractiveness of Guernsey as a place to live and work for those supporting our economy and community.’

But he warned that the island needed to keep working to move in the right direction.

‘This performance doesn’t just happen but is as a result of a number of years of effort and discipline and the maintenance of our stability,’ he said.

‘This has created the right conditions for a positive economic environment. However, we cannot take this for granted and assume it will continue. As a small, open economy, we remain more vulnerable than large economies so there is no room for complacency.’

Guernsey’s GDP - a measure of the of the island’s economy - continued to grow in real terms in 2018 by 1.7%. The growth in GDP in 2016 and 2017 has also been revised up to 3% and 4.6% respectively as more data has become available.

There are indications that the GDP also grew in 2019, but is predicted to be slower that the previous three years. Official estimates will not be published until the summer.

The population has begun to grow after several years of decline. Annual population growth rates accelerated at the end of 2018 - with 62,506 in the island -as a result of fewer people moving away from the island, but the total size of the population remains about 240 people smaller than it was at its peak in 2011.

The birth rate in Guernsey remains lower than its norm and there are fewer births than deaths per year.

Guernsey’s population is forecast to increase to a maximum of 64,000 people by 2034. Beyond this point the population is projected to fall, declining to 59,000 by 2065.

The number of people in employment is on the rise, with 31,544 working in June 2019. The median level of earnings was £33,622, which has increased 0.9% in real terms. Finance, the public sector and retail are the island’s biggest employers.

Conditions in the property market have stabilised. The total number of local market properties sold in the year has increased and prices remain significantly lower in real terms than at their peak in 2013. Price to earning’s ratio has dropped from 15.2 in 2013 to 12.6 in 2018. However the loan to value ratio has been rising from 76% in 2013 to nearly 82% in 2018.