Archive for September, 2012

Guam’s Economy Grew 1.2 Percent in 2010

The economy of Guam grew 1.2 percent in 2010, according to new data from the Bureau of Economic Analysis (BEA). The growth in real gross domestic product (GDP) largely reflected increases in territorial and federal government spending, along with a shrinking territorial trade deficit.

GDP offers the most comprehensive picture of the territory’s economy. Although more timely indicators like the consumer price index, unemployment, and visitor arrivals are available, GDP looks at all aspects of Guam’s economy, including prices, output, consumer spending, and trade.

For the first time, BEA calculated estimates of GDP by industry, compensation by industry, and detailed consumer spending for the territory. BEA also revised previous estimates for 2002 to 2009.

The 1.2 percent increase in 2010 followed a 1.1 percent gain in 2009 and compares with 2.4 percent growth for the United States as a whole in 2010.

The pickup in territorial government spending reflected more spending on building projects, including the construction of a landfill, as well as more compensation for territorial government employees. The increase in federal government spending reflected increased economic activity by Department of Defense employees.

The improved trade balance contributed 1.1 percentage points to overall growth. Imports declined more than exports, narrowing the trade deficit. Exports add to GDP, while imports subtract from it.

Real consumer spending in Guam declined 3.3 percent in 2010.

GDP by industry and compensation by industry
Taken together, private industries subtracted 0.14 percentage point from overall growth in 2010, while government contributed 1.3 percentage points.

In 2010, the federal government—including a large U.S. military presence—accounted for 30 percent of economic activity in Guam. Federal employee compensation accounted for $952 million of the territory’s total $3.0 billion in employee compensation.

Among private industries, construction contributed 0.49 percentage point to economic growth in 2010, the new estimates show. The accommodations and amusement industry, including hotel and food services—along with other tourism-related services—contributed to overall growth for the first time since 2004.

BEA plans to release estimates for 2011 in the spring of 2013. You can read the latest news release and tables here.

Travel and Tourism Spending Increases

Inflation-adjusted spending on travel and tourism increased at an annual rate of 2.1 percent in the second quarter of the year, the Bureau of Economic Analysis reports. This was slower than the 4.9 percent growth rate in the first quarter. Still, travel and tourism spending outpaced growth in the total U.S. economy. U.S. gross domestic product rose at a 1.7 percent pace in the second quarter after a 2.0 percent growth rate in the first quarter.

The second-quarter increase was largely driven by an 8.7 percent annualized rise in real tourism spending on transportation-related items. That followed a 3.5 percent growth rate in the first quarter.

Meanwhile, spending on passenger air fares dropped at a rate of 3.6 percent in the second quarter after increasing at a 9.8 percent pace in the first quarter. Inflation-adjusted spending on lodging grew at a rate of 3.8 percent in the second quarter, slower than the first quarter’s 5.9 percent pace.

Overall, growth in prices for travel and tourism goods and services slowed. Prices increased at a rate of 0.9 percent in the second quarter after rising at a pace of 6.2 percent in the first 3 months of the year. The slowdown mainly reflected a decline in gasoline prices, which also lowered prices for transportation-related commodities. Prices for passenger air fares also decelerated, reflecting a decline in fuel costs. In contrast, prices for lodging accelerated.

Total employment in the travel and tourism industries increased at a 1 percent annualized rate in the second quarter to more than 7.6 million jobs. That followed a 2.6 percent growth rate in the first quarter. By comparison, overall U.S. employment increased 1.0 in the second quarter after increasing 2.1 percent in the first quarter.

Hotel and restaurant workers showed the biggest upturn, growing at a 2.1 percent pace in the second quarter after a 0.3 percent growth rate in the first quarter. Employment in recreation and entertainment fell at a 3.2 percent pace in the second quarter, in contrast to a 4.3 percent growth rate in the prior period . 

To learn more about travel and tourism spending read the full report.

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