Being on an EU blacklist, and ten months of declining retail sales, are among the chief concerns for businesses on the island, according to Dennis Fagundo, the new president of the Bermuda Chamber of Commerce.
The joint manager of D&J Construction has succeeded John Wight to head up the Chamber, after Mr Wight stepped down following more than three years in the role, at yesterday’s annual meeting.
In 2018, retail sales dropped 2.1 per cent compared with the previous year when the island hosted the America’s Cup.
The most recent monthly Retail Sales Index showed a 5.3 per cent decline in the volume of sales in December, marking the tenth consecutive month of falling sales.
The sector employs more than 3,500 people and heavily uses the services of local businesses and tradespeople.
Asked by The Royal Gazette for his view on the declining sales, Mr Fagundo said: “The retail sales numbers are always a concern, it tends to be an indicator of overall economic activity and confidence going forward. The Chamber will continue to work to address that in many different ways.
“In some ways, it is related to population numbers and other factors outside of our control. We will continue to work on trying to spur that economic growth so that everyone can be successful.”
Last month, Bermuda was placed on a European Union list of noncooperative tax jurisdictions after a drafting error in its Economic Substance Regulations submission to the EU. The Bermuda Government has expressed confidence that the island will be removed from the blacklist when the EU Economic and Financial Affairs Council meets next month.
Mr Fagundo said: “The Bermuda economy is threatened by a number of external factors, economic substance being one. We’ve done very well lately with the anti-money laundering assessment last year, so we need to continue to build on that momentum.
“Temporarily sitting on the EU’s blacklist for the economic substance has given us a little bit of a stumbling block. We can overcome that quite quickly. I’m very hopeful that we will be off the blacklist as of the May 17 meeting, then we can continue to grow the economy and moving forward.”
Yesterday, Butterfield Bank announced 30 early retirements, the loss of 11 positions, and the closure of its Rosebank banking centre — with the major switch by customers from in-branch to online banking cited as a reason why the bank felt it could no longer justify two full-service centres in Hamilton.
Coincidently, the broader impact of technology was highlighted in the Chamber’s annual report, released yesterday. Kendaree Burgess, chief executive officer, wrote: “There are so many new and more efficient ways to do things that now result in less human interaction. This is both good and bad.
“Good in that we will be able to delegate routine tasks to machines and focus on other aspects of work. This is bad news for persons in those industries where tote tasks will give way to machines.”
On the real estate market, the Chamber also reported that prices last year “dropped beyond anything we have seen in recent years”, with some houses and condos on the markets well below $600,000. Those low prices had proved a trigger for “several sales”.
Waterfront properties with docks, and properties selling for $2 million or more, did well in 2018, according to the Chamber. However, it said: “The lower end of the market, below $1 million, hasn’t fared as well — this due to tighter controls on bank lending, higher interest rates and a downturn in the economy which is seeing further cutbacks and job losses, which has a knock-on effect as people curb spending.”
Looking at the year ahead for the Chamber, Mr Fagundo said: “Our role is focused around doing everything we can to create an environment in which business, and through business the rest of the social-economic fabric of Bermuda, can prosper.
“Our focus will continue to be on working with Government and the other stakeholders to help optimise that environment.”