‘Private sector construction and business purchases highest contributor to growth’
Growth in private fixed investment, consumer spending, and exports of service led to a 3-percent increase in gross domestic product for the Commonwealth in 2014, marking the third consecutive year the CNMI economy has grown.
The U.S. Bureau of Economic Analysis released yesterday its estimates of GDP for the CNMI, in addition to estimates for GDP by industry and compensation by industry for 2013. The bureau has also released the first comprehensive revision of economic accounts in the U.S. territories, providing revised estimates of GDP, GDP by industry, and compensation by industry extending back to 2002.
The CNMI’s 3-percent GDP increase is the larger increase compared to other insular areas. The GDPs of Guam grew by 1 percent, American Samoa by 1.6 percent, and Virgin Islands decreased by 0.6 percent for 2014.
The bureau said the estimates show that real GDP—GDP adjusted to remove price changes—increased 3 percent in 2014. For comparison, the bureau pointed to the real GDP of the U.S., excluding territories, which increased by 2.4 percent.
The bureau said the CNMI economy reflected increases in private fixed investment, in consumer spending, and in exports of services.
These increases were partially offset by an increase in imports of goods and services, which is a subtraction item in the calculation of GDP, the bureau said.
“Private fixed investment was the largest contributor to economic growth in 2014, increasing over 50 percent. This increase reflected growth in business purchases of equipment and in private sector construction activity,” the bureau said.
A “widespread growth” in household purchases of goods and services and a continued increase in purchase of motor vehicles reflected a consumer spending increase of 9.1 percent.
Exports of services—which consisted mostly of spending by tourists—increased by 2.6 percent.
“The growth in tourism spending reflected an increase in vistor arrivals to the CNMI,” the bureau said.
BEA Director Brien Moyer, BEA staff Aya Hamano, Central Statistics acting director Tom Torres, and CSD Staff Justin H. Andrew met with Gov. Ralph DLG Torres, Lt. Gov. Victor Hocog, and Commerce Secretary Mark Rabauliman to brief them on the GDP report.
“The local data we provided BEA was compiled to reflect that the increases were attributed to private fixed investments from major renovation and construction activities, consumer spending, and tourism spending as major contributors. For historical comparison, 2009 saw the lowest GDP, as adjusted, for the CNMI at -17.5 percent. The GDP is an important tool to measure the direction and most importantly, to reflect the level of growth activities in our economy. For three consecutive years, the report reflects a steady and gradual growth and that’s what we want to see continue,” Torres said in a statement.
“It will be interesting to see the GDP for 2015 when we factor in the costs for the damaged undersea cable and the devastation from Typhoon Soudelor in light of the continued growth in construction, tourism, and consumer spending activities. We are working on getting that data together for the 2016 GDP report. In the meantime, we expect a follow up report, on an accelerated basis, to be released this summer,” said Rabauliman in a statement.
The CNMI government reported total revenue collections of $125.15 million in fiscal year 2015—short by about $9.18 million compared to the projected revenue for the fiscal year, according to an earlier report from the Office of the Governor.
The government’s total expenditure of $143.43 million exceeded revenues appropriated in last year’s Budget Act
The net effect of revenue and expenditures resulted in a deficit of $9.1 million for the fiscal year and was largely blamed on Typhoon Soudelor and the network outage last July.
The bureau said an agreement between them and the Office of Insular Affairs of the Dept. of Interior would extend and improve the estimates of GDP moving forward.
“The information provided by the CNMI government will continue to be critical to the successful production of these estimates,” the bureau said.
“BEA currently plans to release GDP estimates for 2015 in the summer of 2015. GDP by industry and compensation by industry estimates for 2014 will also be released at the same time,” it added.
The complete report by BEA on the CNMI GDP can be found at www.bea.gov or see http://www.bea.gov/newsreleases/general/terr/2016/CNMIGDP_022816.pdf