V.I. gross domestic product, a standard measure of total economic activity in the territory, decreased 13.2 percent in 2012, after falling 6.6 percent in 2011, adjusting for price changes, according to the latest figures released Monday from the U.S. Bureau of Economic Research.
By comparison, in the rest of the U.S., not counting the territories, real GDP increased 2.8 percent in 2012 after increasing 1.8 percent in 2011, according to the Bureau of Economic Research, which is a part of the U.S. Department of Commerce.
The decline reflects a decrease in government spending and a decrease in exports that stem from the decline and shuttering of the Hovensa refinery on St. Croix. If one excluded petroleum imports and exports, real GDP "would have increased 2.6 percent in 2012 … primarily reflecting growth in exports of rum," according to the report. [VIGDP 080213]
Construction spending also declined over the two-year period, both in the private market and government construction, with activity in 2012 dropping more steeply than in 2011. Government employee compensation also fell in both years, due both to layoffs and government pay cuts.
The report includes data going back to 2005. Total real V.I. GDP was $4.46 billion in 2005, rising to $4.85 billion in 2007. It declined to $4.27 billion in 2008 and $4.26 billion in 2009; rose to $4.43 billion in 2010, then dropped to $4.36 billion in 2011 and $4.23 billion in 2012. GDP has remained above the 2004 level of 3.8 billion, but below the 2005 level.
According to the report, these estimates were developed under the Statistical Improvement Program funded by the Office of Insular Affairs of the U.S. Department of the Interior. It also indicates this year’s release comes a year sooner than past releases, marking an acceleration in the availability of V.I. GDP estimates.
