"Mixed picture" painted by Economic Overview

Tuesday 22 May 2018

The total size of the island’s workforce grew again last year, according to the States of Guernsey’s biennual Economic Overview, but population fell, the housing market slumped into the first months of 2018 and median earnings did not increase.

The report, produced by Strategy and Policy, brings together core government data to provide an overview of current economic conditions - it paints a mixed picture of the island's economic state.

Highlights of the report include the local housing market stabilising through 2017. The increase in properties sold was reflected in nominal price rises. But while the improving conditions did suggest a growth in local confidence, the first quarter of 2018 showed a year-on-year decline in both the number of transactions and the real price of properties sold, setting the market back again. 

The most recent population statistics, for the year ending June 2017, show a continued net emigration.

As a result the size of the population between compulsory school age and the State pension age continues to fall. Long-term, the persistence of low levels of net emigration presents difficult challenges for the island in the context of an aging population.  

An increase in workforce participation rates (the percentage of the adult population who are in work) has, however, offset this in the short-term. The number of people employed continued to grow, with the total size of the workforce increasing to the end of 2017. This highlighted a year-on-year increase in every quarter for almost three years.  

The growing workforce and low unemployment mirrors the situation in the UK. However, like the UK, the increased activity in the workforce has not led to an increase in median earning as might be expected. Increases in median earnings continue to lag behind price inflation and as a result fell by 0.5% in real terms in 2017.

In terms of data relating to specific sectors, there has been some positive signs. While conditions within the finance sector are mixed overall, the insurance subsector had a particularly successful 2016 and indications are that growth in the sector continued in 2017.  

Elsewhere in the economy, the professional and business services sector continued its steady expansion, although the rate of employment growth has slowed. The Construction sector appears to be showing some signs of stabilising with a small increase in total employment in the sector over the year ending December 2017.