After declining for six consecutive years largely due to declines in the garment manufacturing industry, the CNMI economy grew in 2010.
The CNMI's real gross domestic product or GDP-adjusted to remove price changes-increased by 2.3 percent compared to the revised 18.8-percent decrease just a year ago. This is based on a report released yesterday by the U.S. Department of Commerce's Bureau of Economic Analysis.
The BEA report calculated that GDP in the CNMI was $619 million in 2010, up 2.3 percent from $605 in 2009.
GDP measures the output of goods and services produced by the private and public sectors. It is the primary indicator with which to measure the state of the economy at a certain period in time.
For comparison, real GDP for the U.S., excluding the territories, increased 2.4 percent in 2010.
Gov. Benigno R. Fitial and Lt. Gov. Eloy S. Inos, Delegate Gregorio Kilili C. Sablan (Ind-MP), CNMI Commerce Secretary Sixto Igisomar, and Saipan Chamber of Commerce president Douglas Brennan separately welcomed the release of the 2010 GDP report yesterday.
Fitial said he is “extremely pleased” that the CNMI's economy saw much improvement in 2010.
“Lt. Gov. Inos and I are proud that our administration has worked hard to find ways to rebound from the economic crisis in the region. Today, we are truly delighted to see that under our watch, we have delivered promising results for our economy and our people. Even tourism services increased because of the number of visitors to the islands, offsetting continued declines in exports of goods,” the governor said.
Sablan, for his part, said he was encouraged to see an uptick in GDP after six straight years of declines, including a drop of 19 percent in 2009.
“It is encouraging to see that economic activity picked up in 2010. We need all the encouragement we can get after years of economic decline. But looking around today, many people would say that our current economy is still getting worse, not better. GDP is half what is was in 2002. So we still have a long way to go to fixing our economy. But, at least in 2010, we had some growth,” Sablan said.
Brennan, meanwhile, said the Saipan Chamber of Commerce always welcomes improved statistical analysis reflecting the CNMI's economic situation.
“The SCC agrees with the analysis presented by BEA as accurately reflecting data gathered. Territorial government spending accounted for total compensation increases, and a slight increase in locally produced exports, accounted for the changes in GDP trends. Hopefully, this represents the bottom as we pass through it,” Brennan said.
For the first time, the CNMI's report includes GDP figures by industry, compensation by industry, and detailed consumer spending.
“With the new additions to the CNMI GDP report, we are able to hone down a bit more on the source of increases within the GDP. This positive increase largely reflects increases in consumer spending, export of services, the tourism sector, and territorial government consumption, expenditures, and gross investments,” Fitial said.
U.S. Commerce BEA deputy director Dr. Brian Moyer, economist and program manager Aya Hamano, and Nicole Mayerhauser, chief of the National Income and Wealth Division, were on hand yesterday morning to personally present the latest GDP report to the governor.
Igisomar, who joined BEA officials in a briefing yesterday with the governor, lauded the BEA for its continued support and efforts to effectively track the CNMI's GDP on an annual basis.
“We appreciate the timely release of the GDP report and we continue to work with the BEA and the Department of the Interior to assist the CNMI with necessary technical assistance and/or guidance to speed up future report releases to within a year, if not less,” he said.
The full report can be accessed at the CNMI Department of Commerce website, http://commerce.gov.mp.
BEA also said per capita real GDP for the CNMI increased in 2010, reflecting the growth in real GDP and a continued decline in the population.
It said “the growth of the economy in 2010 largely reflected increases in territorial government spending, in consumer spending, and in exports of goods and services. Economic growth was tempered by an increase in imports.”
Exports increased for the first time after five consecutive years of decline. Tourism services, which make up the majority of exports of services, increased due to an increase in the number of visitors to the islands, offsetting continued declines in exports of goods, BEA added.
In 2010, spending on both goods and services contributed to the increase in overall consumer spending for the year.
Net foreign travel, calculated as spending by CNMI residents abroad less spending by nonresidents in the CNMI, contributed negatively to growth in consumer spending as spending by visitors to the CNMI outpaced that of CNMI residents traveling abroad
The significant declines in manufacturing from 2005 to 2009 reflected the decline of the garment manufacturing industry.
Total compensation grew in 2010, reflecting increases in both private and government compensation.
However, compensation for the manufacturing sector continued to decline, falling each year from 2005 to 2010.
BEA currently plans to release estimates for 2011 in the spring of 2013.