EMBARGOED UNTIL RELEASE AT 2:00 P.M. EDT, WEDNESDAY, MAY 26, 2021 BEA 21-21 Technical: Christina Hovland (BEA) (301) 278-9076 [email protected]Media: Jeannine Aversa (BEA) (301) 278-9003 [email protected]Tanya Harris Joshua (OIA) (202) 208-6008 [email protected]Gross Domestic Product for the U.S. Virgin Islands (USVI), 2019 Today, the Bureau of Economic Analysis (BEA) released estimates of gross domestic product (GDP) for the U.S. Virgin Islands (USVI) for 2019, in addition to estimates of GDP by industry and compensation by industry for 2018. 1 These estimates were developed under the Statistical Improvement Program funded by the Office of Insular Affairs (OIA) of the U.S. Department of the Interior. Gross Domestic Product for 2019 The estimates of GDP for the USVI show that real GDP—GDP adjusted to remove price changes— increased 2.2 percent in 2019 after increasing 1.6 percent in 2018 (table 1.3). As shown in chart 1, the increase in real GDP reflected increases in private fixed investment, exports, and consumer spending. These increases were partly offset by decreases in inventory investment and government spending. 2 Imports, which are a subtraction item in the calculation of GDP, increased. 1 These estimates are based on limited source data and are subject to revision. 2 “Consumer spending” refers to “personal consumption expenditures.” “Inventory investment” refers to “change in private inventories,” which is abbreviated CIPI. “Government spending” refers to “government consumption expenditures and gross investment.” 2.2% 3.93pp 12.52pp -11.55pp -6.62pp 4.49pp -0.58pp -15 -10 -5 0 5 10 15 GDP Consumer spending Private fixed investment CIPI Government spending Exports Imports Percent Percentage points (pp) Chart 1. Contributions to Percent Change in Real GDP for the USVI, 2019 U.S. Bureau of Economic Analysis Notes: "Change in private inventories" is abbreviated CIPI. Imports are a subtraction item. Thus, an increase in imports results in a negative contribution to GDP.
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EMBARGOED UNTIL RELEASE AT 2:00 P.M. EDT, WEDNESDAY, MAY 26, 2021 BEA 21-21
Gross Domestic Product for the U.S. Virgin Islands (USVI), 2019 Today, the Bureau of Economic Analysis (BEA) released estimates of gross domestic product (GDP) for the U.S. Virgin Islands (USVI) for 2019, in addition to estimates of GDP by industry and compensation by industry for 2018.1 These estimates were developed under the Statistical Improvement Program funded by the Office of Insular Affairs (OIA) of the U.S. Department of the Interior.
Gross Domestic Product for 2019 The estimates of GDP for the USVI show that real GDP—GDP adjusted to remove price changes—increased 2.2 percent in 2019 after increasing 1.6 percent in 2018 (table 1.3).
As shown in chart 1, the increase in real GDP reflected increases in private fixed investment, exports, and consumer spending. These increases were partly offset by decreases in inventory investment and government spending.2 Imports, which are a subtraction item in the calculation of GDP, increased.
1 These estimates are based on limited source data and are subject to revision. 2“Consumer spending” refers to “personal consumption expenditures.” “Inventory investment” refers to “change in private inventories,” which is abbreviated CIPI. “Government spending” refers to “government consumption expenditures and gross investment.”
2.2%3.93pp
12.52pp
-11.55pp
-6.62pp
4.49pp
-0.58pp
-15
-10
-5
0
5
10
15
GDP Consumerspending
Private fixedinvestment
CIPI Governmentspending
Exports Imports
Percent Percentage points (pp)
Chart 1. Contributions to Percent Change in Real GDP for the USVI, 2019
U.S. Bureau of Economic Analysis
Notes: "Change in private inventories" is abbreviated CIPI. Imports are a subtraction item. Thus, an increase in imports results in a negative contribution to GDP.
Private fixed investment doubled from the previous year, reflecting growth in business purchases of equipment and in construction, including of homes. A refinery and oil storage facility on St. Croix invested in major capital improvements during 2019 as part of the current owner’s preparations to resume refining operations that were shut down by the former owner of the facility in early 2012. Additionally, disaster-related insurance payouts and federal assistance supported the reconstruction and major repairs of businesses and homes that were destroyed or heavily damaged by two major hurricanes in September 2017. Within exports, services increased 23.0 percent. For the USVI, exports of services consists primarily of spending by tourists and business travelers. According to USVI government statistics, total visitor arrivals to the USVI increased in 2019; the number of air visitors, who spend substantially more in the islands on average than cruise visitors, increased 30.5 percent. 2018 visitor arrivals by air had been low in the aftermath of the 2017 hurricanes. Consumer spending increased 5.8 percent, reflecting growth in household purchases of goods, such as motor vehicles and food, and services, including health care. These increases were partly offset by declines in inventory investment and government spending. The decline in inventory investment reflected a slowdown of petroleum products imported and stored in the islands. Government spending decreased 15.4 percent, reflecting a decline in spending on disaster response and recovery activities by the federal and territorial governments. 3 4
3 Fiscal year 2019 for the Virgin Islands primary government and most independent agencies covers the period from October 2018 through September 2019; for select independent agencies, the fiscal year covers the period from July 2018 to June 2019. 4 The Government of the United States Virgin Islands Open Finance database is available at https://usvi.spending.socrata.com/.
How to Interpret Contributions to Percent Change in Major GDP Components There is often interest in how much a specific GDP component contributes to the change in real GDP. BEA publishes this measure in news release table 1.4. Chart 1 shows both the percent change of total real GDP and the contributions (in percentage points) of each major component to that change. For example, exports of goods and services accounted for 4.49 percentage points of the 2.2 percent increase in real GDP in 2019. This means that, all else equal, had exports neither increased nor decreased in 2019, real GDP would have decreased 2.3 percent.
Effect of Natural Disasters and the COVID-19 Pandemic on Data Availability for 2018–2019 GDP
The USVI suffered extensive damage from two major hurricanes in September 2017. These hurricanes, along with the ongoing COVID-19 pandemic, affected the availability of various data sources typically used in the estimation of USVI GDP. For example, as of mid-May 2021, several of the USVI government’s fiscal year 2019 financial statements were unavailable.3 In place of these financial statements, BEA used information from budget documents, unaudited operating and financial statements, reports on federal grant expenditures, and the Government of the U.S. Virgin Islands’ new Open Finance database, which includes checkbook-level spending by the primary government.4
Gross Domestic Product by Industry and Compensation by Industry for 2018 The estimates of GDP by industry show that the private sector was the major source of the increase in real GDP in 2018 (table 2.5). Goods-producing industries were the largest contributor to the increase, reflecting increases in construction activity in the months following Hurricanes Irma and Maria.5 Accommodation and food services was the largest negative contributor in the private sector, reflecting a decline in tourism activity following the hurricanes. Total visitor arrivals to the USVI decreased in 2018; the number of air visitors, who spend substantially more in the islands on average than cruise visitors, decreased more than 20 percent. The territorial government sector also contributed negatively to economic growth, primarily reflecting operating losses of government utilities. The compensation by industry estimates, which are measured in current dollars, show trends in compensation for major industries (table 2.6). Total compensation increased in 2018; the largest contributor was goods-producing industries, which includes construction. U.S. Bureau of Labor Statistics data show that wages paid to construction industry workers in the USVI increased 84 percent.6 Revisions to GDP and Related Estimates This release also includes the results of a comprehensive update of the territorial economic accounts. Comprehensive updates are typically performed every 5 years, based on the Census Bureau’s every-5-years economic censuses of island areas. With the comprehensive update, estimates for 2002 to 2018 have been revised to incorporate improvements to source data and methods, including information from:
• The U.S. Census Bureau’s 2017 Economic Census of Island Areas (ECIA), which provides the most thorough and detailed statistics on the structure of the USVI economy,
• Newly available USVI government data sources, such as government financial statements for fiscal year 2018, a 2015 visitor exit survey, consumer prices for 2017 and 2018, and the Government of the U.S. Virgin Islands Open Finance database,
• Revised data on shipments from the U.S. Census Bureau’s International Trade in Goods and Services (FT-900) report, and
• BEA’s U.S. national income and product accounts. The revised real GDP estimates exhibit a similar pattern of growth as the previously published estimates (chart 2). However, there are notable revisions within the components of GDP, including to consumer spending and private fixed investment.
5 Construction activities performed by private companies on behalf of the government sector are reflected within private sector industry value added. 6 The data are available at www.bls.gov/cew/.
Consumer spending increased less than previously estimated between 2012 and 2017, reflecting the incorporation of 2017 ECIA data on sales to resident households and visitors. Private fixed investment also increased less than previously estimated over this period, reflecting the incorporation of 2017 ECIA data on capital expenditures by private businesses. Revisions to GDP in earlier years primarily reflect improvements to the methods and source data used to estimate private fixed investment in structures. The new estimates incorporate newly available data on business revenues by type of construction from the 2017 ECIA and are inflation-adjusted at a higher level of detail. The reference year for inflation-adjusted measures has been updated to 2012. This is the same reference year used in BEA’s national GDP estimates. The estimates of GDP by industry and compensation by industry have been updated to incorporate the above data sources. Future Directions OIA and BEA will continue to work to extend and improve the estimates of GDP for the USVI. The information provided by the USVI government will continue to be critical to the successful production of these estimates. BEA plans to release GDP estimates for 2020 for the USVI this winter. GDP by industry and compensation by industry estimates for 2019 will be released at the same time.
Chart 2. Percent Change from Preceding Year in Real GDP for the USVI
U.S. Bureau of Economic Analysis
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Additional Information Resources
• Stay informed about BEA developments by reading the BEA blog, signing up for BEA’s email subscription service, or following BEA on Twitter @BEA_News.
• Historical time series for these estimates can be accessed at BEA’s Gross Domestic Product (GDP) for the U.S. Territories.
• Access BEA data by registering for BEA’s Data Application Programming Interface (API).
• For more on BEA’s statistics, see our monthly online journal, the Survey of Current Business.
• BEA's news release schedule
Definitions Gross domestic product (GDP) is the value of the goods and services produced by the U.S. Virgin Islands (USVI) economy less the value of the goods and services used up in production. GDP is also equal to the sum of personal consumption expenditures, private fixed investment, change in private inventories, net exports of goods and services, and government consumption expenditures and gross investment. Personal consumption expenditures (PCE), also referred to as “consumer spending,” measures the goods and services purchased by “persons”—that is, by households and by nonprofit institutions serving households (NPISHs)—who are resident in the USVI. Private fixed investment (PFI) measures spending by private businesses, nonprofit institutions, and households on fixed assets in the USVI economy. Fixed assets consist of structures, equipment, and software that are used in the production of goods and services. Change in private inventories (CIPI), or “inventory investment,” is a measure of the value of the change in the physical volume of the inventories—additions less withdrawals—that businesses maintain to support their production and distribution activities. Net exports of goods and services is the difference between exports of goods and services and imports of
goods and services. Exports measures the portion of total USVI production of goods and services that is provided to the rest of the world. Imports measures the portion of total USVI expenditures that is accounted for by goods and services provided by the rest of the world. Government consumption expenditures and gross investment, or “government spending,” measures the portion of GDP that is accounted for by the government sector. Government consumption expenditures consists of spending by government to produce and provide services to the public. Gross investment consists of spending by government for fixed assets that directly benefit the public or that assist government agencies in their production activities. Gross domestic income (GDI) is the sum of incomes earned and costs incurred in the production of GDP. In national economic accounting, GDP and GDI are conceptually equal. Current-dollar estimates are valued in the prices of the period when the transactions occurred—that is, at “market value.” Also referred to as “nominal estimates” or as “current-price estimates.” Real values are inflation-adjusted estimates—that is, estimates that exclude the effects of price changes.
Statistical Conventions Quantities and prices. Quantities, or “real” volume measures, and prices are expressed as index numbers with a specified reference year equal to 100 (currently 2012). Quantity and price indexes are calculated using a Fisher chain-weighted formula that incorporates weights from two adjacent years. “Real” dollar series are calculated by multiplying the quantity index by the current-dollar value in the reference year (2012) and then dividing by 100. Chained-dollar values are not additive because the relative weights for a given period differ from those of the reference year.
Table 1.1. Gross Domestic Product Table 1.2. Real Gross Domestic Product, Chained Dollars Table 1.3. Percent Change From Preceding Year in Real Gross Domestic Product Table 1.4. Contributions to Percent Change in Real Gross Domestic Product Table 1.5. Percent Change From Preceding Year in Prices for Gross Domestic Product and Price
Indexes for Gross Domestic Product Table 1.6. Gross Domestic Income Table 1.7. Revisions to Percent Change in Real Gross Domestic Product Table 2.1. Value Added by Industry Table 2.2. Value Added by Industry as a Percentage of GDP Table 2.3. Real Value Added by Industry Table 2.4. Percent Changes in Real Value Added by Industry Table 2.5. Contributions to Percent Change in Real Gross Domestic Product by Industry Table 2.6. Compensation of Employees by Industry
NOTE. Detail may not add to total because of rounding.
20162003 2004 2005 2006 2007
[Millions of dollars]
2019
(p) Fiscal year 2019 audited financial statements for the primary government and various independent agencies were not available in time for incorporation into these estimates. Preliminary estimates of territorial
government spending are based on information collected from budget documents, unaudited operating and financial statements, reports on federal grant expenditures, including disaster assistance grants, and the
Per capita real GDP (chained dollars) 27 43,609 43,162 44,260 45,803 46,491 47,934 48,016 48,444 49,145 45,326 38,795 36,391 35,814 35,729 36,371 36,172 36,852 37,777
2006
1. BEA estimates based on data from the U.S. Virgin Islands Bureau of Economic Research and the U.S. Census Bureau.
20182004 2005
[Millions of chained (2012) dollars]
2019
(p) Fiscal year 2019 audited financial statements for the primary government and various independent agencies were not available in time for incorporation into these estimates. Preliminary estimates of territorial
government spending are based on information collected from budget documents, unaudited operating and financial statements, reports on federal grant expenditures, including disaster assistance grants, and the
USVI government's Open Finance website.
Table 1.2. Real Gross Domestic Product, Chained Dollars
(p) Fiscal year 2019 audited financial statements for the primary government and various independent agencies were not available in time for incorporation into these estimates. Preliminary estimates of
territorial government spending are based on information collected from budget documents, unaudited operating and financial statements, reports on federal grant expenditures, including disaster assistance
grants, and the USVI government's Open Finance website.
2010 2014 20162009Line
2003 2004 2005 2006 2007 2008 20152013 2017
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U.S. Virgin Islands
Table 1.4. Contributions to Percent Change in Real Gross Domestic Product
(p) Fiscal year 2019 audited financial statements for the primary government and various independent agencies were not available in time for incorporation into these estimates. Preliminary estimates of
territorial government spending are based on information collected from budget documents, unaudited operating and financial statements, reports on federal grant expenditures, including disaster assistance
grants, and the USVI government's Open Finance website.
NOTE. Detail may not add to total because of rounding.
2011 201320102008 20092002 2003
2012
20122007
2007 2008 201320112009 2010Line
2018
NOTE. Percentage-point contributions do not sum to the percent change in real gross domestic product because of rounding and differences in source data used to estimate GDP by industry and the