Guam – While Guam’s GDP rose by .2 percent in 2017 – making it the seventh year in a row that it has increased, an analysis of our economy shows that it’s the private sector, not government spending, that is to be credited for our real growth.
In a news release, the Bureau of Economic Analysis states that Guam’s GDP increased by .2 percent last year after increasing by .3 percent in 2016. The growth in the economy reflected an increase in consumer spending which largely reflected growth in retail trade activity.
The local government spending on construction and equipment increased; however, this growth was offset by a decline in construction activity on Defense and private sector projects. In addition to that, a decrease in investment spending also contributed negatively to the economy.
Earlier this week an Adelup press release touted the first private project to be approved for H2B visas under the National Defense Authorization Act: 38 workers for 5M Construction’s Tsubaki Tower hotel project. Unlike previous approvals for H2B workers, which were strictly for projects within the fence, Guam Economic Development Authority and the Department of Labor were able to make the case that the the military buildup is actually driving private sector hotel construction.
The GDP contributor by industry comparison shows that the private sector was the largest contributor for real growth. Federal government spending has decreased. Visitor spending has decreased after a three year increase. While total arrivals increased slightly, tourist expenditures were lower overall. This trend is evident in the decrease of higher-spending Japanese tourists and recent surges of lower spending Korean tourists.
US Department of Commerce Bureau of Economic Analysis: 2017 Guam GDP Release:guamgdp_111318