Growth in tourism offset by decreases in local government and business investment
HAGÅTÑA, Guam—Guam’s Bureau of Economic Analysis released yesterday its estimates of gross domestic product for Guam for 2018, in addition to estimates of GDP by industry and compensation by industry for 2017.1 These estimates were developed under the Statistical Improvement Program funded by the Office of Insular Affairs of the U.S. Department of the Interior.
Revised estimates of GDP for 2015 to 2017, as well as revised estimates of GDP by industry and compensation by industry for 2015 and 2016, are also presented in this release.
GDP for 2018
The estimates of GDP for Guam show that real GDP—GDP adjusted to remove price changes—decreased 0.3 percent in 2018 after increasing 0.2 percent in 2017. For comparison, real GDP for the United States (excluding the territories) increased 2.9 percent in 2018 after increasing 2.4 percent in 2017.
The decline in the Guam economy in 2018 reflected decreases in territorial government spending and private fixed investment that were partly offset by growth in exports of services.
Territorial government spending decreased 1.3 percent. Guam government spending on construction and equipment decreased despite progress on major infrastructure projects, including an improved wastewater treatment plant.
Private fixed investment decreased 0.9 percent, reflecting a continued decline in business spending on construction. Although overall construction employment grew in 2018, much of this employment was related to U.S. Department of Defense construction; in the private sector, a number of major projects were delayed.
Exports of services, which consists primarily of spending by tourists, grew 2.2 percent. This reflected increases in total visitor arrivals and average spending by Korean and Japanese tourists, who make up much of Guam’s tourist market.
GDP by industry and compensation by industry for 2017
The estimates of GDP by industry for Guam show that the private sector was the source of the growth in real GDP in 2017. The largest contributor to growth was distributive services, reflecting increased activity of the retail sector.
The compensation by industry estimates, which are measured in current dollars, show trends in compensation for major industries. Total compensation increased in 2017, primarily reflecting growth in distributive services and in “other” private industries.
The accompanying tables present estimates for GDP and its major components, GDP by industry, and compensation by industry. Also included in this release are estimates for the major components of gross domestic income.
Revisions to GDP
Estimates for 2015 to 2017 that were released on No. 14, 2018, have been revised in order to incorporate improvements to source data, including newly available data for territorial government spending and revenues from government financial statements and reports. The revised estimates show a similar pattern of inflation-adjusted growth as the previously published estimates.
Moving forward, an agreement between OIA and BEA will extend and improve the estimates of GDP for Guam. The information provided by the Guam government will continue to be critical to the successful production of these estimates.
BEA will conduct a comprehensive update of GDP for Guam next year. Estimates of GDP will be revised to reflect methodological improvements and the availability of more complete data over time, in some cases back to 2002. Information from the Census Bureau’s 2017 Economic Census of Island Areas, the most comprehensive industry data available for Guam and the other island areas, will be incorporated at this time. BEA currently plans to release these estimates, in addition to new GDP estimates for 2019, in the fall of 2020. GDP by industry and compensation by industry estimates for 2018 will also be released.
Full release and tables can be found at https://www.bea.gov/news/2019/gross-domestic-product-guam-2018. (PR)