Information released yesterday by the Statistics Unit reveals that profits from the finance sector fell by about eight per cent in 2001.
The drop followed several years of strong growth.This was echoed in the profit generated per full-time equivalent employee, which attained a peak in 2000 and then declined by ten per cent in 2001.However, the Statistics Unit stresses that the news must be seen in the context of widespread economic recession, the impact of September 11 and the sharp stockmarket decline which began in 2000.The figures are from a sample survey of the financial services sector in Jersey covering 2000 and 2001.
They follow a pessimistic report released earlier this week by stockbrokers Collins Stewart, warning that the Island’s economy – heavily dependent on the finance industry – is in danger of moving into a downward spiral.Policy and Resources president Senator Frank Walker disputes this gloomy forecast and argues that investors from outside the Island have ‘colossal confidence’ in the Jersey finance industry.The new figures show that five out of every eight pounds of Jersey’s £348 million total tax revenue in 2001 came from the finance sector, either as tax on the sector’s profits or on the pay of its employees.
The 62 per cent contribution in 2001 was five per cent higher than in 1999 but seven per cent lower than in 2000.Meanwhile, average salary costs rose continuously throughout the period 1996-2001, and between 1998 and 2001 increased at a rate more than double that of inflation.
Expenditure on locally purchased goods and services increased by two-thirds between 1996 and 2001.The finance sector accounted for about one quarter of Jersey’s labour force in 2001, employing almost 12,000 staff and having increased by almost a quarter since 1996.There was a high level of staff movement within the finance sector, almost half of all recruitment and turnover being internal to the sector itself.