Economy still down, tourism numbers up

While majority of economic indicators continued to slump in the first quarter of 2008, visitor arrivals and hotel occupancy figures seem to show that the Commonwealth’s tourism industry is on the mend.

The Department of Commerce’s Central Statistics Division made public the January-March 2008 Economic Indicator report yesterday and, like previous releases, it again does not paint a rosy picture of the islands’ economy.

Business gross revenue, general fund revenue, imports, exports, banking activity, remittance, and building permits continued to slide in the first quarter of 2008, according to the report.

On the brighter side, visitor arrivals to the CNMI posted quarterly growth for the first time in years, while daily hotel rate and hotel occupancy inched up, which are positive news to the tourism industry of the Commonwealth.

Business gross revenue decreased by 8.3 percent to some $416 million in the first three months of 2008 compared to about $454 million in the first quarter of 2007.

In contrast, government expenditure grew in the January-March 2008 period to $43.9 million from $42.3 million posted in the same three months of 2007—a 3.8 percent rise.

General fund revenues—taxes and fees collected—also showed a decline of 8.8 percent to $40 million in the first quarter of 2008 from the $43.8 million recorded in the first quarter of 2007.

Imports also took a hit, decreasing by 18.3 percent from the 114,440 tons in the first quarter of 2007 to a mere 93,460 in the first quarter of 2008.

With only seven garment manufacturers still in operation, exports continued its downward trend and experienced a mammoth 53.34-percent drop to $47.54 million. Exports totaled $101.89 million a year ago.

Banking activity was also on the negative with total deposits shrinking 3 percent to $515.53 million compared to $531.2 million in the immediately preceding fourth quarter of 2007.

Total loans also dipped by 3 percent to $156.72 million in January-March 2008 from $161.61 million in the last three months of 2007.

With the downsizing of the garment industry, remittances have also fared poorly the past several years and the same is true in the first quarter of 2008, going down 18 percent to $20.8 million from the $25.4 million remitted in the January-March period of 2007.

Building permits also dwindled to 57 in January-March 2008 from the 64 issued in the October-December 2007 period.

The CNMI also had 4.4 percent fewer telephone lines in the first quarter of the 2008 compared to the same period in 2007—down to 28,631 from 29,939.

Visitor arrivals to the Commonwealth, meanwhile, witnessed a 1 percent increase as 110,690 tourists came to the islands in the first three months of 2008, compared to 109,643 during the January-March period in 2007.

Hotel room rate also increased to $101.1 in the first quarter of 2008, up 5.5 percent from the $95.83 recorded in the first quarter of 2007.

Hotel occupancy rate is also encouraging, increasing by 1.2 percent to 70.6 percent in the Janaury-March 2008 period. It was 69.8 percent in the first quarter of 2007.

The Commonwealth Auto Dealers Association also witnessed a 9.1 percent rise in auto sales in the period, having sold 25 more cars than the 275 it disposed of in the first quarter of 2007.

The Commerce report also indicated that prices of consumer goods continued their upward trend in the first quarter of 2008.

The Consumer Price Index witnessed a 1.7 increase to 114.1 during the first quarter of 2008. It was 112.4 a year ago.

This means that a market basket of goods and services that cost $100 during the 2003 base period costs $114.1 in the first three months of the current year.

The most alarming rise in prices were recorded for medical care and food. Medical care went up 7.9 to 107.9, while food rose 7.1 to 112.

Alcoholic beverages (2.5 increase to 106.4), recreation (2.1 to 102.4), apparel (0.6 to 102.4), and housing and utilities (0.1 to 141) also increased in the first three months of the year.

Transportation and other good and services remained the same, while education and communication even showed a decrease in cost (-0.3).