GVA figures just released show that for the first time in six years Jersey’s economy has stabilised with no reduction in the overall size of GVA. Agriculture and Tourism were up which is very encouraging. Finance was down 3% and has reduced by almost third since the beginning of the Financial Crisis.
It is important to remember that these figures are 10 months old and are a lagging indicator. In fact the prospects and performance of the finance industry have been steadily improving. The context of the finance figures is that we have had the biggest slowdown in a century – interest rates which impact our Bank profits haven’t been this low, for this long, for 315 years. But the trend indicates a levelling out since the financial crisis and in some sectors we are seeing significant improvement.
At £1.18bn – 2013 was the 4th best profit figure for the industry in the last 15 years, and with almost £1m spent every day, by the industry, in the local economy then local businesses benefit tremendously.
Business indicators for 2014 are more positive with the latest quarterly figures for the industry, for example, showing that the banking sector remains stable, and the company formation rate is at its highest since 2008. The funds industry is performing well with assets under administration breaking through the £200bn barrier in June. Funds profits were up 38% in 2013 – so quite a buoyant picture in that sector. We have also seen a number of new businesses enter the market in Jersey this year.
Poised on the threshold of a return to growth, it is vital that we continue to promote and support our major industry and ensure the trend towards growth continues this year, and in this respect the continued commitment of Government to the industry is crucial.
Looking forward another very positive indicator is employment intentions with 1,000 new jobs likely to be created over the next 3- 5 years. The vast majority of these positions will be jobs for local people. In 2013 the industry recruited 310 young Jersey school leavers and University graduates, the highest figure since 2008.
Perhaps the most encouraging forward indicator is the Latest Business Tendency Survey which shows that businesses are increasingly optimistic about future profits, business activity and local employment. Our investment in new markets, new products and services and reputational advocacy through studies such as Jersey's Value to Britain are paying off.