Guam's economy fell into negative territory in 2018, failing to eke out at least modest growth for the first time in at least a decade.
As gauged through the gross domestic product, or GDP, Guam's economy decreased by 0.3% in 2018, compared to the previous year, according to the U.S. Bureau of Economic Analysis in a report released Oct. 9.
Between 2008 and 2017, Guam posted growths of between .25% to more than 2% each year.
For comparison, real GDP for the United States, excluding the territories, increased 2.9% in 2018 after increasing 2.4% in 2017.
The estimates of GDP for Guam show that real GDP — GDP adjusted to remove price changes — decreased 0.3% in 2018 after increasing 0.2% in 2017.
The amount of goods and services produced on Guam in 2018 as measured in real GDP dipped to $5.203 billion in 2018 from $5.217 billion in 2017.
GovGuam spending in construction and equipment slides
The decline in 2018 reflected decreases in the government of Guam spending and private fixed investments that were partly offset by growth in tourism, the report states.
GovGuam spending decreased by 1.3% in 2018. Guam government spending on construction and equipment decreased despite progress on major infrastructure projects, including an improved wastewater treatment plant, the report states.
Federal government spending increased from $1.67 billion in 2017 to $1.68 billion in 2018 on Guam. GovGuam spending dipped from $1.15 billion in 2017 to $1.13 billion in 2018.
Private fixed investment decreased by 0.9%, reflecting a continued decline in business spending on construction. Although overall construction employment grew in 2018, much of this employment was related to the Department of Defense construction, the report states.
In the private sector, a number of major projects were delayed, the report states.
Guam government and private sector officials have mentioned the decreased availability of foreign workers on temporary H-2B visas has caused the slowdown in construction work outside of the military projects.
Exports of services, which consist primarily of spending by tourists, grew 2.2%, the report states.
The report notes the increase in total visitor arrivals and average spending by Korean and Japanese tourists, who make up much of Guam’s tourist market.
Private sector source of growth in real GPD
Guam's private sector was the source of the growth in real GDP in 2017. "The largest contributor to growth was distributive services, reflecting the increased activity of the retail sector," the report states.
The compensation by industry estimates, which are measured in current dollars, show trends in compensation for major industries. Total compensation increased in 2017, primarily reflecting growth in distributive services and in “other” private industries.
These estimates of gross domestic product for Guam for 2018 were developed under the Statistical Improvement Program funded by the U.S. Department of the Interior's Office of Insular Affairs.