Monthly Economic and Financial Developments, November 2012

Published: Friday December 21st, 2012

Available indicators of domestic economic activity continue to suggest a modest growth momentum, concentrated in tourism and construction-related foreign investment projects. With limited spillover benefits to other areas of the economy, employment conditions stayed weak and private sector demand has dampened by the persistence of high loan arrears. In price developments, domestic energy costs contracted in November. The monetary outcome featured a contraction in both banking sector liquidity and external reserves, reflecting the seasonal increase in foreign currency demand.

Indications are that the tourism sector was negatively affected by the impact of Hurricane Sandy on the eastern coast of the United States, which disrupted travel itineraries and offset the benefits arising from the hosting of two annual international sports events in New Providence. Overall, hotel room revenue, based on a sample of properties in New Providence and Paradise Island, declined by 4.1% in November over the previous year. There was a 3.3 percentage point decrease in the occupancy rate to 60.6%, which outstripped the 1.2% hike in the average daily room rate (ADR) to $203.57. In contrast, positive trends were noted over the eleven-month period, as total room revenue advanced by 4.5%, buoyed by an increase in the average occupancy rate to 69.2% from 64.5% a year earlier, while the average daily room rate declined by 3.2% to $225.77.

Domestic energy prices fell in November, as both gasoline and diesel costs contracted by 5.4% to $5.48 per gallon and by 0.6% to $5.33 per gallon over the prior month, but firmed year-on-year by 6.0% and 4.7%, respectively. In terms of electricity prices, the Bahamas Electricity Corporation’s fuel charge decreased by 3.4% per kilowatt hour (kWh) over the month to 26.32¢ per kWh, which was a marginal 0.4% above the previous year’s level.

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