NMI economy generates $1.3B sales

Despite the loss of the garment industry, the CNMI economy—now mainly fueled by tourism—was still able to generate $1.3 billion in sales and employed 14,215 people in 2012, based on the U.S. Census Bureau’s latest CNMI economic census report released yesterday.
Gov. Eloy S. Inos separately said yesterday this affirms the CNMI’s “overall sign of growth and resiliency” amid uncertainties facing the islands’ businesses and investors with respect to minimum wage, immigration federalization, foreign labor availability, foreign investor status, and utility and transportation costs.

The $1.3 billion sales in 2012 were generated by 1,339 business establishments, which had $208.4 million in annual payroll.

Lee Wentela, chief of the U.S. Census Bureau’s Economic Census Branch, personally presented the results of the 2012 CNMI economic census to the governor yesterday afternoon on Capital Hill.

“One thing that’s notable. We had a 90 percent response rate from the businesses here, and that exceeds the national average by about 10 percent. That’s always a good indicator of the quality of the report,” Wentela later told Saipan Tribune in an interview at the Department of Commerce.

Wentela pointed out that the 2012 statistics are not comparable to those gathered in the 2007 economic census because the latest census covered more aspects of the CNMI economy, including utilities and transportation.

If one were to exclude the six government-run establishments related to utilities and transportation that were included in the census for the first time, the CNMI’s 2012 business sales would only be $1.2 billion.

This is a 7.3-percent decrease from the 2007 sales of $1.3 billion, generated by 1,191 businesses.

Moreover, the 2007 data still had garment manufacturing sales figures whereas the 2012 data didn’t have any, and that reflected the largest decreases in sales, payroll, and employment in both dollar amounts and percentages. The last of the remaining garment factories on Saipan closed in early 2009.

The economic census, done every five years, provides the most authoritative and comprehensive source of information about the entire U.S. economy, including the territories such as the CNMI.

“Just as this report is used by the GDP [gross domestic product] folks when they work on our 2013 numbers, we too will cross-reference our local data and calibrate our findings from other agencies to plan ahead and maintain the growth. This clearly supports our efforts in making more hotel rooms and more visitors,” the governor said, when sought for comment.

CNMI tourism arrivals are expected to further grow, and new hotels are lined up to be built. This includes a 2,000-room facility that will be part of a minimum $2 billion casino resort development on Saipan. Another new hotel will be built in Marpi, and another one will be built in San Antonio. The former The Palms Resort in San Roque will also reopen under the global hotel brand Sheraton.

Specific sectors

Excluding the six government-run establishments related to utilities and transportation that were included for the first time, the 2012 economic census statistics show 1,333 business establishments in the CNMI, up from 1,191 in 2007.

Again, excluding the six newly added establishments, there were 13,678 paid employees in 2012, a decrease of 39.5 percent from the 22,622 employees in 2007.

The $193.2 million payroll also marked a 21.5-percent decline from the $246.1 million payroll for 2007.

As for the other findings, the retail trade sector accounted for the most sales in 2012 with $314.1 million. This was an increase of 15.6 percent from the $271.8 million in sales for 2007.

Retail trade employed 2,463 people, a decrease of 11.1 percent from the 2,770 employed in the sector in 2007, while payrolls increased 7.3 percent to $30.7 million—from $28.6 million five years earlier.

As expected, the largest decreases in sales, payroll, and employment—both in dollar amounts and percentages—were in the manufacturing sector.

These decreases included a drop of 89 percent in sales to $20.9 million in 2012 (from $189.7 million in 2007), a decline of 91.7 percent in employment to 592 in 2012 (from 7,094 in 2007), and a payroll decline of 88.2 percent to $6.7 million (from $56.6 million in 2007).

Large employment declines were also seen in the accommodation and food services sector (3,195 in 2012, down from 4,772 in 2007) and in the transportation and warehousing sector (a drop to 641 paid employees from 1,105 five years earlier).

The largest employment increases were in the health care and social assistance sector, which had 725 paid employees in 2012 compared with 267 in 2007 and the construction industry with 821 paid employees in 2012, up from 528 in 2007.

In 2012, the CNMI had 143 businesses with 20 or more employees, representing 11.1 percent of all businesses. These businesses accounted for 61 percent or $804 million of total sales.

In 2007, 200 businesses had employment of 20 or more, representing 17.1 percent of all businesses. They accounted for 67.4 percent or $866 million of total sales.

‘Grateful’

The governor said he is grateful for the assistance and guidance provided by U.S. Census Bureau “as we continue to rely on their expertise, capacity, and resources to augment our austerity conditions.”

“We welcome this much needed report and we extended a sincere appreciation to Mr. Lee R. Wentela and his team for their patience as the CSD [Central Statistics Division] continues to rely on them for a lot of data assessments and collections,” Inos said.

CSD is currently staffed with two personnel while other supporting staff are borrowed from within Commerce and the governor’s office, he added.

Economic census data is important for everyone involved with the economy—from the government policy makers trying to assess potential impact of proposed legislation to the trade associations looking to assess trends within their industries, to the individual businesses trying to analyze potential new markets.

It also provides key input to the CNMI’s gross domestic product calculations.

Wentela, for his part, also thanked the 1,339 business establishments in the CNMI, the local Commerce’s Central Statistics Division, the Governor’s Office, and the other government agencies that contributed to the completion of the latest census.

The 2012 economic census results for Guam were also released yesterday.

Wentela said the statistics for American Samoa will be released on May 6; the U.S. Virgin Islands, on July 15; and Puerto Rico, between February 2015 and September 2015.