CNMI GDP decreases in 2018;
Gaming industry revenues and visitor arrivals decline
CAPITOL HILL, SAIPAN (November 7, 2019) — Today, the Bureau of Economic Analysis (BEA) is releasing estimates of gross domestic product (GDP) for the Commonwealth of the Northern Mariana Islands (CNMI) for 2018, in addition to estimates of GDP by industry and compensation by industry for 2017.1 Â 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.
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 this release.
Gross Domestic Product for 2018
The estimates of GDP for the CNMI show that real GDP—GDP adjusted to remove price changes—decreased 19.6 percent in 2018 after increasing 25.5 percent in 2017 (see Table 1.3). For comparison, real GDP for the United States (excluding the territories) increased 2.9 percent in 2018 after increasing 2.4 percent in 2017.
The decline in the CNMI economy primarily reflected decreases in exports of services and private fixed investment that were partly offset by growth in government spending.
Exports of services decreased 38.8 percent, due to a decrease in visitor spending, including on casino gambling (see Table 1.3). Revenues from casino gambling dropped over 50 percent. The number of visitors to the CNMI decreased 21.5 percent, reflecting the effects of Typhoon Yutu, which made landfall on Saipan and Tinian in October 2018.
Private fixed investment decreased 19.8 percent, reflecting a decline in business spending on construction and equipment. However, business spending on construction and equipment remained at historically high levels, supported by continued development of the casino resort on Saipan and the start of post-typhoon repairs and reconstruction activity (see Table 1.2).
Partly offsetting the declines in exports of services and private fixed investment was growth in government spending, particularly by the federal government (see Table 1.4). Federal government spending more than doubled from the previous year, primarily due to recovery activities following Typhoon Yutu.
Gross Domestic Product by Industry and Compensation by Industry for 2017
The estimates of GDP by industry for the CNMI show that both the private and government sectors contributed to the growth in the economy in 2017 (see Table 2.5). The largest contributor was accommodations and amusement, reflecting growth in tourism and output of the casino industry.
The compensation by industry estimates, which are measured in current dollars, show trends in compensation for major industries (see Table 2.6). Total compensation increased in 2017, reflecting growth in all industries shown except manufacturing. The largest contributors were accommodations and amusement and the territorial government.
The accompanying tables present estimates for GDP and its major components, GDP by industry, and compensation by industry. Also included in this release are estimates for the major components of gross domestic income.
Revisions to GDP
Estimates for 2015 to 2017 that were released on October 18, 2018 have been revised in order to incorporate improvements to source data, including newly available data for territorial government spending and revenues from government financial statements and reports, updated international trade data provided by the CNMI government, and restatements of private company financial information for the gaming sector. The revised estimates show a similar pattern of inflation-adjusted growth as the previously published estimates (see Table 1.7).
Future Directions
Moving forward, an agreement between OIA and BEA will extend and improve the estimates of GDP for the CNMI. The information provided by the CNMI government will continue to be critical to the successful production of these estimates.
BEA will conduct a comprehensive update of GDP for the CNMI next year. Estimates of GDP will be revised to reflect methodological improvements and the availability of more complete data over time, in some cases back to 2002. Information from the Census Bureau’s 2017 Economic Census of Island Areas, the most comprehensive industry data available for the CNMI and the other island areas, will be incorporated at this time. BEA currently plans to release these estimates, in addition to new GDP estimates for 2019, in the fall of 2020. GDP by industry and compensation by industry estimates for 2018 will also be released.
1 These estimates are based on limited source data and are subject to revision.
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