Private Investment at Record Levels, Construction Booming, Tourism Up
The U.S. Virgin Islands' economy is in the "midst of an economic expansion" according to the Bureau of Economic Research (BER). The good news is the result of record increase in private sector activity in construction and financial services, public sector investment in major public works and economic development projects, and record increase in tourism. The U.S.V.I. Gross Territorial Product continues to grow each year, and is expected to increase 3.2 percent in 2005. (http://www.usviber.org/)
Governor Charles W. Turnbull said, "The economic expansion is the result of hard work and sacrifices on the part of the people of the Virgin Islands. We put in place economic reforms that spurred private and public sector growth. We maintained a balanced budget and created a stable and accountable economy. Our goal is to create higher paying private sector jobs, better and more affordable housing, and improved education, health care and public safety."
Public and private sector development will top one billion in 2006. Projects under construction include:
• The $150 million Yacht Haven Hotel and Marina in St. Thomas, which will be finished in 2006 and is expected to add 120 new jobs
• Hovensa, one of the largest oil refineries in the Western Hemisphere is in the midst of a $400 million expansion on St. Croix
• Construction of the $63 million Sapphire Beach Recreational Center and the $40 million Marriott timeshare development on St. Thomas
• The Grand Bay Resort on St. Johns
• The Mashantucket Pequot Tribal Nation, owners of the Foxwoods Resort Casino in Connecticut, is planning a beachfront hotel, marina and casino, with the possibility of condominiums and a championship golf course, for the island of St. Croix.
A major revitalization underway in Frederiksted, St. Croix includes a new harborfront, cruise ship dock, a minor league baseball stadium, sports and cultural center. On St. Thomas, the $31 million Crown Bay Marina and retail center is near completion and capital improvement projects are underway throughout the territory, ranging from historic preservation projects to new road improvement, school construction, wastewater treatment plants, hospitals, parking facilities and a new ferry terminal.
"Construction is expected to be strong over the next year supported by major hotel and casino construction, the upgrade and expansion of roads, housing and seaports and the development of commercial and residential properties," according to the report.
Tourism is also at record levels, with significant increases in both air and cruise ship passengers. For the first three quarters of the fiscal year 2005, total visitor arrivals reached 2.24 million, up nearly five percent from the same period in 2004. The BER projects visitor arrivals to peak at 2.7 million by the end of fiscal year 2005 and reach 2.8 million in 2006.
The manufacturing sector is performing well. The value of refined petroleum products grew by 40 percent in 2004 to reach $6.7 billion, and was the result of higher production levels and higher commodity prices. 2005 will see even higher growth due to a big spike in prices, especially in the 3rd and 4th quarters. The rum industry in the Virgin Islands continues to flourish, with six million gallons shipped in 2005.
The USVI Bureau of Internal Revenue found fiscal year 2005 gross tax revenues are up 11 percent from the year before. Corporate income taxes, a measure of business activity and profits, was up 89 percent, gross receipts taxes were up 11 percent, and the stamp tax, which is based on real estate sales and transfers, was up 15 percent. Personal income tax revenues increased 5 percent.
Private sector job growth is on the rise aided by an 11 percent increase in hiring in the financial and real estate sectors over two years. New construction at the Hovensa oil refinery is expected to create 400 new jobs, while hotel, marina, condominiums and residential development will add hundreds more private sector jobs. Jobs in the tourism and hospitality industry will also rise in 2006.
Austerity measures by the government resulted in a drop in public sector jobs and savings that enabled public employees to receive raises.
The territory's civilian unemployment rate fell to 7.4 percent in the first nine months of this year, a 22 percent decline from 2003. The rate for St. Croix is currently 8.6 percent, down 33 percent from 2003.
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