Productivity falls 2% in Jersey’s finance sector

Pedro Gonçalves
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Jersey’s finance sector, which makes up 40% of the island’s economy, fell by 2% in 2017 in terms of productivity, according to official figures.

Statistics Jersey’s latest Measuring Jersey’s Economy report indicated that last year the Gross Value Added – total economic output – of the Island was £4.381bn, which in real terms was an increase of 0.4% on the previous year.

GVA is calculated by adding the values of goods and services produced within the economy.

The report said that productivity in Jersey had fallen by almost a quarter since its high point in 2007, prior to the global financial crisis.

The finance sector accounted for two-fifths (40%) of the total GVA and for almost half (47%) of all economic activity, excluding the rental income of private households.

It added that financial services was hit hard by the drop in interest rates after the crash, while the increasing number of workers in other industries had recently led to their productivity declining.

‘This decline in the productivity of the Island’s economy overall has been driven by a decline in the productivity of the financial services sector,’ it said.

‘Increased levels of employment in lower productivity sectors has also been a factor in recent years.’

Construction, which enjoyed heightened productivity levels, saw the largest overall growth of 9%.

Agriculture, utilities (electricity, gas and water) and transport, storage and communication also saw increased productivity in 2017.

The average economic standard of living of Jersey residents, as measured by GDP per head of population, decreased by almost 1% in 2017 as the total economic output was less than the increase in the resident population.

It stood at £40,790 in 2017, almost a quarter higher than in the UK and 20% than in Guernsey, where it stood at £49,040.