Positive economic indicators emerge

But real estate industry woes continue

There were some positive trends
noted in the Cayman Islands economy in the first three months of this year,
even as the country continued to suffer through its worst recession in recent
memory.

Between 1 January and 31 March, new
company registrations in Cayman grew by nearly 14 per cent compared to the
first three months of last year. New company registrations increased across the
board.

The number of banks and trusts
stayed about the same, while the number of registered trust companies dipped by
about 8 per cent.

Not all was rosy on the finance
industry front, according to the Economics and Statistics Office report.

Mutual funds registrations in the
Cayman Islands fell by 3.4 per cent as of March, compared to March 2009.
However, there was a steady decline in those funds over a period of several
years.

“The number of funds recorded was
the lowest since the first quarter of 2007,” the economic report read, adding
that total listings in the Cayman Islands Stock Exchange fell 18 per cent in
the first quarter of 2010. “This is largely associated with the…reduction in
mutual funds attributable to the continued effects of the global financial
crisis.”

The statistics office reported that
tourist arrivals for both stay-over and cruise ship visitors increased
significantly from the first quarter of 2009. The first three months of each
year are typically Cayman’s busiest tourism season.

Despite a declining US economy,
Americans still represented an overwhelming majority – 80.3 per cent – of total
tourist arrivals in January, February and March.

Although the number of tourists
increased during the period, the average length of stay in hotels and local
apartments dropped slightly.

Cruise ship calls to George Town
port in the first quarter of 2010 dropped from 178 calls to 173. However, the
number of cruise passengers in port per day grew slightly to an average of
5,245 people – an increase of 69 visitors compared to a year ago.

 

Real estate hurting

The major downward economic trend
shown in the first quarter economic report involved in the local real estate
industry.

According to the statistics office,
total traded properties fell 15 per cent compared to January through March of
2009. There were just 434 properties traded between January and March of this
year.

“This is only the second time that
properties traded fell below the 500 mark,” the report stated.

The number of traded properties was
just more than half of those bought and sold in the first quarter of 2006 –
when there were 823 properties traded, according to the government.

There was also a large drop in the
value of property transactions in the first quarter of 2010. Transactions in
first quarter 2009 totalled $87.8 million in value, while the value fell to
$68.4 million this year.

 

Government spending

The economic report also showed up
some rare highlights in the area of government spending.

According to the statistics office,
government revenues grew by 14.1 per cent in the first quarter of 2010, while
government spending fell by 27 per cent compared to the first quarter of 2009.

Government revenues largely
increased through the implementation of new fees and taxes – most of which took
effect in January.

Major expenditure cuts included a
7.4 per cent drop in personnel costs and a 4.5 per cent decrease in government
subsidies.

However, the amount of government
interest payments on debt during the quarter more than doubled. Total central
government debt rose to more than $500 million compared to about $350 million
in the first quarter of 2009.

1 COMMENT

  1. The economic depression started in 2008. This article compare growth in 2009 which does paint a true picture. As a "layman", shouldn’t economic growth be compared to statistics during a standard year like 2006 or 2007? This article also has more bad trends than good.. i think the headline is misleading more so with the current economic position of teh USA.

    Editor’s note: We’re not sure if the reader is saying the article ‘does’ or ‘does not’ paint a true picture. But, surely, comparing any economic statistics to 2006 – the year Cayman took in more revenue from imports than it ever had due to the reconstruction following Hurricane Ivan – is likely not to paint a ‘true’ picture.

  2. r3 is absolutely correct. To take an economically bad year and compare it to another economically bad year, then report that things are better based on last year’s results is very misleading. BOTH years have been a disaster. To do a true comparison, you do need to, as R3 said, take a healthy hear and then compare it to 2010, or 2009. If you don’t want to compare it to 2006 because it was a great year, then take a 3 year average 2003-2006. The reality was that the economy was steadily growing. So — please be realistic in your reporting. You can say that things have improved since last year, but to not mention the comparisons to the previous year (s) only tells part of the story.

  3. Looks like the voting feet were staff adjustment after all. And as I thought, the people who actually voted with their feet were the residents who left after Ivan and did not return. Their homes stand abandoned and unsold. Can someone tell chicken little that the sky is not falling – Yet!.

  4. Actually, we did a quick look on the ESO website and found the following information on CI imports.

    Total imports:
    2004 – CI $724.7 million
    2005 – CI $995.3 million
    2006 – CI $888.7 million
    2007 – CI $881.8 million

    So 2005 was actually higher than 2006 for total import value.

  5. Obviously there is positive economic recovery. Land is getting cheaper. Housing and condo’s are shaving off tens of thousands in their selling price, and dropping. And rents are plummeting.

    If that’s economic recovery. Lets hope for 5 more years of this stuff please.

  6. Hey, i have two points to raise which are unrelated:
    1. I suggest changing the law to allow businesses to open on a Sunday. This change may givethe economy some momentum with a greater turnover of sales per week.

    2. Where is the mosquito plane. On South Church street there has been standing water since the last downpour two weeks ago.

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