EDITORIAL – A Christmas toast to Cayman’s strong economy

The Cayman Islands has experienced five consecutive years of economic growth. That’s cause for early Christmas cheer (no mug of eggnog required).

The new report from the Economics and Statistics Office isn’t all roses – there are always some thorns – but, on balance, the numbers show that Cayman continues to enjoy a strong, and growing, private sector.

Some highlights:

Cayman’s gross domestic product (a measure of the total size of the economy) reached $2.8 billion at the end of 2015, and grew a further 3 percent in the first half of 2016.

The economy grew faster in 2016 than it did in the first half of 2015, and it outpaced government’s forecasts.

As of spring 2016, Cayman’s population stood at 61,259 people, an increase of 3.7 percent from the year before.

The number of work permits continued its two-year growth trend, increasing to 23,411 as of mid-2016.

Concurrently, Cayman’s total unemployment rate fell to an infinitesimal 3.9 percent – and the unemployment rate of Caymanians dropped to a mere 5.6 percent, which is verging on the theoretical rate of “full employment” (meaning, a state where every able person who wants to work, is working).

Because of weakness in the European and Canadian markets, which are struggling with their own economic and currency issues, air arrivals to Cayman dipped slightly by 1.4 percent, putting them back on pace with still-sterling numbers from 2014.

Cruise arrivals, however, continued growing, this time increasing by 7.1 percent compared to the previous year. (Compared to the first half of 2013, cruise arrivals in the first half of 2016 increased by a remarkable 23 percent.)

A handful of high-value projects are driving activity in the construction industry, including notably Dart’s continuing expansion of Camana Bay.

The bullet points above aren’t just causes to celebrate “a job well done” in the past year, but are also reasons to be bullish on Cayman’s prospects for the coming year.

The upward trends aren’t the result of luck or “one-off” events, but are indications that Cayman is moving from “strength to strength” and are the product of dedicated investors and developers who have an interest in strengthening our country over the long term. Looking at the figures, we see no reason why we can’t improve further on the positive points and can’t reverse course on our few weaknesses.

For example, we expect our air arrivals to pick up once visitors to the newly opened Kimpton Seafire resort start being counted in government’s totals, and in the years to come, when other projects now waiting in the wings begin to take center stage, such as Dart’s future hotels, the Ironwood golf resort and the planned expansions to Health City Cayman Islands.

On social media Monday morning, Premier Alden McLaughlin shared the Compass story on the ESO report, adding the comment, “Good government.”

Some readers might expect us to criticize the premier for attempting to bask in the private sector’s limelight.

Not so. Premier McLaughlin is correct that one important measure of “good government” is how much the public sector has allowed the private sector to thrive, typically by giving businesses the freedom to do so.

With some exceptions – particularly in regard to matters related to immigration – this Progressives government, as well as past administrations, generally have understood the proper role of the public sector is to facilitate and support the private sector when (and only when) necessary.

With this perspective, it is entirely appropriate that Premier McLaughlin and his government take their share of credit for the health of the country’s economy.

During this holiday season, we in Cayman have much to be joyful about. After all, our strong economy isn’t just a bunch of figures on paper but represents the goods and services that are available and accessible to Cayman’s population – energy, food, healthcare, shelter, transportation, education, luxury items … including, yes, Christmas presents.

 

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1 COMMENT

  1. The problem with these figures is what you try to read into them and how much of what you’d like to see the stats telling you (the ‘rose-tinted glasses’ syndrome?) isn’t really there. On the surface the ESO report may appear healthy but there are some underlying issues.

    Yesterday I posted a comment about the tourism figures. The Compass story quoted ESO as blaming the drop in arrivals from Europe as a knock on from the UK’s Brexit vote and the decline in Canadian tourists on economic problems. While both are very plausible neither excuse stacks up well when you look at the figures around the region as a whole. UK tourism to destinations like Jamaica. the DR and Costa Rica is booming, airlines like Thomson are actually increasing the numbers of flights to several neighbouring destinations. In Cuba Canadian tourism has increased by 50% in two years with the latest available figures I can find showing an annual figure of 1.2million arrivals, many of them repeat visitors. That’s not a slight blip in the figures – it’s a landslide and it for sure isn’t heading this way.

    Whilst ESO may have got it partly correct and this is a belt-tightening exercise as tourists look for cheaper destinations the fact is that people are still taking Caribbean vacations but they’re just not coming here. Bottom line is that building hotels like the Kimpton with a nightly room rate that’s almost as much (based on Jan/Feb) as the price of a week’s all-inclusive stay in Cuba isn’t going to pull in many visitors from the UK and Europe. In fact it’s far more likely to put them off even more. As I’ve posted before – over-priced doesn’t equal high-end and the Europeans in particular are very savvy about this.

    Your editorial concludes that, “our strong economy isn’t just a bunch of figures on paper.” I hate to disagree with you but if you allow unrealistic excuses to be substituted for realistic assessment that’s exactly what it is and in 12 months time you’re just going be looking at a variation of those stats but this time presented with slightly different excuses for the blatant non-performance of the tourism industry.

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