IoD's concerns as population growth drives the island's economy

Wednesday 07 August 2024

The economy is strong and will continue to grow but the IoD is concerned about the social and economic impact of the pace of population growth which is driving the island's economy.

Responding to the quarterly population, employment and earnings statistics, published by the States of Guernsey this week, the IoD Guernsey’s lead on economics Richard Hemans has warned that we need to be able to grow the population naturally as well as through migration. 

In an opinion piece published in full HERE, Mr Hemans highlights the island's continued declining birth rate, coupled with a high death rate.

"The island is completely dependent on net immigration to grow the population because the natural decrease in the population during the year ending 30 September 2023 was the highest in the last ten years," he explained.

"Births remain very low (they have fallen by 30% in the last decade) and deaths are very high (they have increased by 20% in the last two years). This socioeconomic trend deserves further investigation because we need to be able to grow the population naturally as well as through migration. 

"Net migration of 886 people was easily the highest number in the last fifteen years and shows how attractive the island is as a place to live and work. It is significantly higher though than the States’ target and it’s likely that the island’s housing capacity and infrastructure will be impacted in the short to medium term.

"As far as the economy is concerned, it is likely such a large increase will be inflationary as demand outstrips supply, but it does suggest that the economy is strong and will continue to grow. Indeed, the good news is that nearly all the increase in the population was in people of working age and the dependency ratio continues to improve. Whilst this is essential for the long-term health of the island, it does raise questions about the social and economic impact of the pace of population growth."

Unemployment remains very low in Guernsey but "it is clear that the Retail and Real Estate sectors are struggling" warns Mr Hemans. 

He also cautions that "high inflation continues to affect real incomes" but adds that "it is positive that earnings are keeping pace and employers continue to create jobs".

You can read Mr Hemans opinion in full HERE.