The U.S. Bureau of Economic Analysis (BEA) has released its estimate of Guam’s gross domestic product (GDP) for 2018, showing that real GDP decreased by 0.3 percent in 2018, the first time that the island recorded negative GDP since 2008.
The report, dated Oct. 9, 2019, was developed under the Statistical Improvement Program funded by the Office of Insular Affairs (OIA) 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 the report.
According to BEA, the decline in the Guam economy in 2018 reflected decreases in territorial government spending and private fixed investments that were partly offset by growth in exports of services.
“Territorial government spending decreased 1.3 percent while Guam government spending on construction and equipment decreased despite progress on major infrastructure projects, including an improved wastewater treatment plant,” the report stated.
Private fixed investment also decreased by 0.9 percent, reflecting a continued decline in business spending on construction.
Although overall construction employment grew in 2018, BEA stated much of this employment was related to Department of Defense construction and in the private sector, a number of major projects were delayed.
Exports of services, which consist primarily of spending by tourists, grew 2.2 percent. BEA stated this reflected increases in total visitor arrivals and average spending by Korean and Japanese tourists, who make up much of Guam’s tourist market.
According to the report, 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 the increased activity of the retail sector.
Compensation by industry estimates, which are measured in current dollars, show trends in compensation for major industries. According to the report, total compensation increased in 2017, primarily reflecting growth in distributive services and in “other” private industries.