Keep up-to-date with the latest news, events and seminars taking place at Profiles of Bermuda.

Confidence in public schools shaken - Hamilton, Bermuda 10DEC11
The recently-released full census reports shows that the number of students in private schools is now reaching parity with the number in public schools. In 2010, the 3,938 students enrolled in private schools comprised 47% of all student enrollment (8,321 - note there were an additional 404 students for whom their schooling was not indicated.) This figure was up from the 38% recorded in the 2000 census.

The greatest level of confidence in public schools was at the primary level. Here 60% of students attended, down from 66% in 2000. At the middle school level, parity is almost reached with 49% attending public schools and 51% in private. However, there was a 34% decline in students attending middle schools compared to 2000 when 64% of all middle school students attended public schools.

It is at the senior school level that parents have the least confidence in public education. In 2000, 55% of high school students attended a public school. In 2010, 55% of high school students now attend private school. No break down was available by race but in 2000, 80% of black parents sent their children to a public school and a similar number of white parents (79%) sent their children to a private school. Since the census in May of 2010, there has been a transfer of students from the private sector to the public sector due to the lingering recession. No data on actual numbers are available.

Annual Inflation Rate Set to Rise Moderately in 2011 10MAY2011
Bermuda's rate of inflation is expected to rise moderately this year, in spite of world economic conditions. It is anticipated that the annual inflation rate is likely to hover around 3% compared to 2.4% in 2010. Recent reports coming from the United States
seem to confirm this as they indicate that the price of oil is not likely to spike up inflation. Indeed, some economists suggest that oil prices may well be stabilising (oil prices dropped to $95 from $114 last week), although others are not quite so sure.

The implications for Bermuda are clear. With the backdrop of a struggling economy, rising inflation rates will put upward pressure on union leaders to demand wages above the rate of inflation, which in turn would cause more inflation, resulting in the economy struggling even further. Still union leaders are likely to argue that any pay deals lower than the rate of inflation results in a pay cut for its members. A stable inflation rate would prevent all this from happening.

So while at present inflation appears to be holding, that situation could change. The price of oil is key to the equation so this has to be watched. Another key indicator is the US unemployment rate, which went back up to 9% form 8.8%. This has the opposite effect on inflation. With more people unemployed, there will be less spending and that serves to keep inflation in check. But if oil prices move beyond $100 a barrel, inflation is likely to increase. What really will happen? We're not totally sure (and neither is anyone else) so watch this space for more updates. Download the full press release here.

Budget paper earns incomplete grade 19FEB11
"Shared sacrifices and financial discipline... that will help us to win the future and reset the dial," is how Finance Minister the Hon. Paula Cox described her first budget as Premier. In laying the foundation for what was to come, Premier Cox painted a picture of a world in much deeper financial turmoil than Bermuda in an effort to disprove, contrary to the late Hubert Smith's song, "Bermuda is another world." Click here for the full story in the Bermuda Sun.

Total job levels fall modestly but unemployment is cause for concern 01MAR10
Last April, in light of the worsening economy, we updated our employment forecasts. At that time we stated that in spite of much doom and gloom about potential job losses, our research data indicated that realistically job losses in Bermuda would fall by less than 1%. On Friday, the Bermuda Government released preliminary figures for employment in 2009. It turns out that local jobs lost were actually 1.8%, falling from a revised figure of 40,213 to 39,502. So while our forecast was off minimally, we were correct in our belief at that time that the economy would do better than most expected.

Also recently released was Government's first ever Labour Force Survey. The two-tiered sample of 1,500 persons found that in May of 2009, Bermuda's official unemployment rate was 4.5% with some 1,700 persons looking for work. This was the highest level recorded since 1991, also a recession year, when the rate was 6% and 2,100 persons were looking for work. In the 2000 Census it was 3%. So while unemployment levels are cause for concern, they have not reached the levels of 1991.

Minister Paula Cox in her recently-released Budget Statement placed much faith in an expected recovering economy. But if the experience from our US neighbours is anything to go by, evidence of the economy picking up has had only minimal positive impact on job levels. Some in the US has seen a shift in employment practices and are now openly discussing the possibility of the 'permanent part-time' worker. This new worker will not be employed full-time which means less pay and most likely fewer benefits. Will this trend emerge in Bermuda? In some respects it already has. The retail sector has reduced hours of its workers in order to save jobs. And reduced working hours has been the norm for hotel and restaurant workers. This trend is likely to spread to other sectors. The 2010 Census, to be conducted in May of this year, will provide greater insight into this trend. This story was also featured in the Bermuda Sun.

Family-friendly budget? 26FEB10
The Government today released its Budget for 2010/2011. Finance Minister Paula Cox says it's a budget to assist families and businesses. What do you think? Click on the link to read more. Bermuda Sun

School Closures Inevitable 25JAN10
When it was revealed last week that the Government had intentions of closing some primary schools there was, perhaps not surprisingly, concern expressed by both the general public and educational interests groups. However, if one were to look at Bermuda's population trends over the past decade, one could only have concluded that school closures would be inevitable. In recent years there has been much emphasis on our aging population and the fact that it is growing. The corollary to this is that there are fewer younger people. And this is indeed true. In 2000, the 5-9 age group totalled 4,031 or 6.5% of the population (62,059). Official population projections put the total at 3,702 in 2010 or just 5.7% of the population (64,566) and about 300 fewer than in 2000. My own projection for the 2010 population is 67,800 which means that the 5-9 age group's representation could be even lower at 5.5%. Again using official statistics, the elderly population, those 65 and older, is set to rise to 8,813 or nearly 13% (12.9%) of the population (up from 10.8% or 6,722 in 2000). So, from a purely governmental point of view, if you have an aging population more of its resources has to be devoted to seniors and less to the younger members of the population. That is why we hear of Future Care programmes and an extension of HIP insurance for seniors. Likewise that is why we also hear of school closures. It should be stated, however, that the Government has not abandoned the young as it has introduced free bus and ferry travel, free daycare and free tuition at the Bermuda College. But rest assured, as the numbers of seniors continues to grow, expect a greater proportion of Government revenues to be devoted to them. This story was also featured in the Royal Gazette.

Dallas, Texas 16JAN10 - Breaking News
Profiles International released today its new skills testing service. In addition to using its other Profiles' assessments, clients can now assess the skills of potential employees. These assessments are available in a variety of fields including Technology, Finance, Retail, and Medical, to name a few. They include, for instance, specific assessments in basic English and math, the Microsoft Suite of products, nursing skills, and hundreds more. Moreover, these assessments are available in various languages, such as French, and are all completed online. Profiles of Bermuda is a Strategic Business Partner of Profiles International and will offer these products to its clients by March of 2010. More details will be released at that time.

Inflation rate set to fall to 30-year low!
Bermuda’s rate of inflation, after reaching a nearly two-decade high of 4.8% in 2008, has fallen off dramatically in 2009. In April of this year, we predicted that the annual inflation rate could be as low as 2.4% in 2009. However, in light of monthly rates falling below predicted levels, we have revised our forecast. We now believe that the annualised inflation rate for 2009 will be 1.8%, the lowest rate since 1976. (Official statistics
have only been released for October 2009). We estimate that November’s inflation rate
will come in at 0.7%, the same rate as in October, and December’s will more than double
to 1.5%. If this holds true, the annual inflation rate, taking all 12 months into consideration, will end up at 1.8%.

Economists largely attribute the falling inflation rates to the falling price of oil, now at $79 a barrel and inching up to its year-high price of $82 a barrel. Low inflation rates are generally good for the economy and could trigger economic growth. Allan Greenspan, former Chairman of the US Federal Reserve, once stated that, “For all practical purposes, price stability means that expected changes in the average price level are small enough and gradual enough that they do not materially enter business and household decisions.” In other words, households and businesses will carry out their business without being too concerned about price increases.

Lower inflation rates could also have a downward influence on interest rates. Currently, variable interest rates for mortgages can be obtained for as low as 5.75%, the same rate for secured educational loans. Other personal loans start at 6.75% Perhaps the major impact of low interest rates are on wages and rents. Typically workers’ representatives seek wage increases somewhat above the rate of inflation. Given the forecasted
rate of 1.8%, wage settlements are likely to be just above the 2% level. Rent increases will likely go the same route. Consumers should also be putting their money in investments that yield more than 1.8% so that their money does not lose value.

Profiles will continue to update these forecasts as new data becomes available. Download the full press release here.

Poll Results Go International!
Profiles of Bermuda poll featured in the Sun St. Kitts/Nevis newspaper.

Opposition to independence hardens but the economy is in fair shape!
More than three-quarters of voters (77%) now oppose independence for Bermuda compared to two-thirds (64%) in the lead up to the 2007 general election. By demographics, all subgroups opposed independence. The widest gaps were found by race and party lines. Nearly all White and Other races (94%) opposed independence, compared to 67% of Blacks. And by party lines, the results were similar: 93% of those who voted for the opposition United Bermuda Party in the last election were opposed to independence, compared to 65% of those who voted for the ruling Progressive Labour Party. Another result of interest was found by income. Households earning the least (under $50,000) were most opposed (84%). By age, those between the ages of 35 and 54 were most opposed to independence (78%).

Turning to the economy, one-third (33%) rated it as good or excellent. More than half (55%) rated the economy as fair, with just 11% rating it as poor. The remainder were unsure. However, 78% felt that the economy had worsened in the past year. Just under 1 in 10 (8%) felt the economy had improved, while a similar amount (9%) felt the economy had remained the same. The remainder were unsure.

The survey was conducted among 401 registered voters between June 12 and 17, 2009 and has a margin of error of plus or minus 4.9%. This is the last of survey results in this series.

Download the full press release here.

PLP support falls but UBP fails to make gains!
If an election were held tomorrow, the ruling Progressive Labour Party would garner 38% of the vote with the opposition United Bermuda Party taking 31% of the vote. Some 17% were either undecided or would vote for independents, while 7% each would either not vote or refused to say who they would vote for. However, compared to the last election, 49% stated that they voted for the PLP and 32% for the UBP. Just 1% claimed that they were undecided at the last election. While the PLP has lost support, the UBP has failed to capitalise on PLP dissatisfaction.

By sex voting habits were similar - 36% of males and 39% of females indicated that they would vote for the PLP. For the UBP, the figures were 30% and 32% respectively. For those who were undecided, 17% were males and 18% were females. By age, the PLP’s greatest support was among young people (18-34 year-olds) at 58%. For the UBP it was the older generation (55 and over) where they got their highest support (40%). One in 5 persons (20%) aged 34-54 would were either undecided or would vote for independents. By race, 94% of all those who would vote for the PLP were Black, compared to 6% of Whites and Others. On the other hand, of all those who stated that they would vote for the UBP, 31% were Black and 69% were of White and Other races. And of all those who stated that they were undecided, 62% were Black and 38% were White and Other races. By income, there were no clear voting patterns. For instance of all those households that earned $100,000 or more, 37% would vote PLP and 36% would vote UBP.


The survey was conducted among 401 registered voters between June 12 and 17, 2009 and has a margin of error of plus or minus 4.9%. More survey results will be released later.

Download the full press release here.

Voters have mixed views on UBP’s future
Voters harbour differing views on the future of the opposition United Bermuda Party. While 43% of voters felt that the party should continue as it presently is, 37% felt that they should disband and form a new party, and 20% were unsure.

By sex, males and females held similar views. 44% of males felt that the party should continue on with 37% feeling that the party should disband. For females, the figures were 42% and 37% respectively. By age, the only group that held a majority view that the UBP should continue was 18-35 year-olds (52%). 43% of the 55 and over group also felt that the party should continue on. The 35-54 year-old group were more inclined to see the party disband and form a new party (40%). Somewhat surprising, the views by race were fairly close. 44% of Blacks felt that the party should continue on compared to 42% of Whites and Others. On the other hand, 39% of Blacks believed that the UPB should disband compared to 31% of Whites and Others.

By income, 50% of households earning $100,000 or more felt that the UBP should continue, as did 45% of those earning between $50,000 and $100,000 and 39% of those earning under $50,000. Households earning between $50,000 and $100,000 were also inclined to see the UBP disband (39%). Along party lines, just over half of United Bermuda Party supporters (53%) felt that the party should continue with 29% feeling that the party should disband. This compares to 45% of Progressive Labour Party supporters feeling that the UBP should continue, and 44% feeling that the UBP should disband.

The survey was conducted among 401 registered voters between June 12 and 17, 2009 and has a margin of error of plus or minus 4.9%. More survey results will be released later.

Download the full press release here.

Premier Brown Rated Lowly and Kim Swan Faired only Somewhat Better!
Just under one-quarter (24%) of registered voters approved of the way Premier Ewart Brown is handling his job compared to 71% who disapproved. The remaining 5% were unsure. When it came to Dr. Brown’s favourability rating, nearly two-thirds (64%) had an unfavourable rating of him while 31% had a favourable opinion. (5% were unsure.) For Opposition Leader Kim Swan, while nearly 4 in 10 voters (39%) had a favourable rating of him, one-third (33%) had an unfavourable rating. More than one-quarter (28%) were undecided.

Job Approval Rating by Demographics
By sex, men and women equally disapproved of the way Premier Brown is handling his job (71% and 70% respectively). By age groups, the 18-35 year-old group was least likely to disapprove (62%) while other age groups, 35-54 and 55 and over, were equally likely to disapprove (73% respectively). Racially, voters were divided about how the Premier is handling his job. While 6 in 10 Blacks (61%) disapproved, 9 in 10 Whites and Others (90%) disapproved. Somewhat surprising for a labour leader, 8 in 10 (80%) of lower-income households (those earning under $50,000) disapproved of the way Premier Brown was handling his job. Those households earning over $100,000 had a 74% disapproval rating while those earning between $50,000 and $100,000 had a 64% disapproval rating. And by party lines, nearly 6 in 10 voters (57%) who stated that they supported the ruling Progressive Labour Party in the last general election disapproved of the way the Premier is handling his job compared to 88% who voted for the Opposition United Bermuda Party.

Favourability Rating by Demographics
By sex, 61% of men and 67% of females had an unfavourable rating of Premier Brown. This compares to 46% of men and 64% of women for Opposition Leader Kim Swan. By age, 70% of those 55 and older had an unfavourable opinion of Dr. Brown, compared to 65% of 35-54 year-olds and 51% of 18-35 year-olds. For Mr. Swan, 45% of 55 year-olds and older had a favourable rating of him while 44% of 18-35 year-olds were unsure. Nearly 4 in 10 (37%) of the 35-54 year old group had an unfavourable opinion. By race, 89% of Whites and Others had an unfavourable rating of Dr. Brown while just over half (54%) of Blacks had an unfavourable rating. For Mr. Swan, the results were similarly polarised. While 57% of Whites and Others had a favourable rating of him, 40% of Blacks had an unfavourable opinion.

By income, nearly three-quarters (74%) of households earning less than $50,000 had an unfavourable opinion of Dr. Brown, compared with 63% of those with household incomes that exceeded $100,000 and 59% of those earning between $50,000 and $100,000. By contrast, Kim Swan had a 41% favourable rating each from households earning less than $50,000 and those with incomes greater than $100,000. Just under 4 in 10 (37%) of households earning between $50,000 and $100,000 had an unfavourable rating of Mr. Swan. By political parties, there were no real surprises. Half of PLP supporters (50%) had a favourable rating of their leader, while 85% of UBP supporters had an unfavourable rating. For Mr. Swan, 58% of UBP supporters had a favourable rating of him compared to 43% of PLP supporters who had an unfavourable rating.

The survey was conducted among 401 registered voters between June 12 and 17, 2009 and has a margin of error of plus or minus 4.9%. More survey results will be released later.

Download the full press release here.

Voters Overwhelmingly Disapprove of Guantánamo Bay Decision!
Registered voters in Bermuda overwhelming disapproved of the decision by the Bermuda Government to accept detainees from Guantánamo Bay. By a margin of 3 to 1 (69% to 22%), voters were not in favour of the decision while just under 1 in 10 (9%) were not sure. Some voters wanted to make it clear, however, that they were not against the former detainees being in Bermuda, but against the process by which they arrived here.

By gender, females were somewhat more likely than males to disapprove of the decision (71% to 67%). By race, margins were wider. While 61% of Blacks disapproved of the decision, 85% of Whites and Others did not support the decision. By age groups, middle-aged (35-54 year-olds) and older voters (55 and over) were most unsupportive (72% and 71% respectively). Nearly 6 in 10 (58%) of those between the ages of 18-35 did not support the decision. And by income, those at opposite ends of the economic divide were most unsettled by the decision. Three-quarters (75%) of persons in households earning less than $50 thousand disapproved of the decision while households with incomes above $100 thousand were also inclined to highly disapprove of the decision (72%). Just over 6 in 10 (64%) of households earning between $50 thousand and $100 thousand disapproved of the decision.

The starkest differences, however, came along party lines. While nearly 6 in 10 persons (56%) who voted for the ruling Progressive Labour Party in the 2007 general election disapproved of the decision, nearly 9 in 10 (87%) of those who voted for the opposition United Bermuda Party disapproved of the decision.

The survey was conducted among 401 registered voters between June 12 and 17, 2009 and has a margin of error of plus or minus 4.9%. More survey results will be released later.

Download the full press release here.

Annual Inflation Rate Could Fall to Lowest Level Since 2002!
Bermuda’s rate of inflation, after reaching a nearly two-decade high of 4.8% in 2008, could in fact fall dramatically in 2009. While in January 2009 the rate increased to 5.2% (our calculations suggest 5.1%) February’s rate fell to 4.4%. Using standard statistical (time-series modelling) techniques, we anticipate March’s rate coming in at around 3.3%, while April’s rate could in fact fall further to 2.2%. If this trend holds throughout the year, the annual inflation rate could be as low as 2.4% in 2009.

A falling inflation rate does not necessarily mean falling prices. What it means is that the rate that prices are increasing has slowed. Just as inflation can loosely be termed as too much money chasing too few goods and services, falling inflation rates means less money chasing those goods and services. If the current economic conditions continue, and our inflation trends hold true, there could be a softening in prices. And we are beginning to see this happening in the housing and rental markets although food prices continue to increase.

While a lower inflation rate increases the spending power of the consumer, it may not immediately translate to increased spending. Consumers, seeing prices stabilizing or falling, may hold onto their money in hope of even lower prices, thus slowing an economic recovery. Retailers, then, will have to give consumers incentives to spend their money, like the Fairmont Group did with their $99 rooms. And consumers, who can afford them, should take advantage of the bargains while they are available.

Profiles will continue to update these forecasts as new data becomes available. Download the full press release here.

Bermuda Job Losses Top 300!
Job losses in Bermuda since August 2008 have topped 300 according to published and unpublished sources. The majority of these jobs were in the banking and international sectors, which means that their impact on the local economy will certainly be felt. However, to what degree these impacts will be felt is debatable. For instance, in July, 2005, landmark retailer Trimingham Brothers closed and with it went some 200 jobs. While the store itself may have been missed, Bermuda quickly recovered from the job losses.

Further, in 2008, Bermuda’s residents spent a total of $1.2 billion on local goods and services and overseas purchases brought back to the island. Average employment income in 2008, adjusted for inflation, was approximately $75,000. This means that unearned income resulting from job losses was approximately $22.5 million. While this seems like a significant amount, in fact it represents less than 2% of what residents spent in 2008. In addition, the 300 jobs lost so far represent less than 1% of the 40,000 jobs in Bermuda’s economy.

So it is likely that the effects of the job losses on the economy, so far, may have been minimal. Given that Bermuda’s tourism season was in the low and shoulder season in the last quarter of 2008 and the first quarter of 2009, gives credence to the low-impact theory. However, as Bermuda approaches its high tourism season with bookings sagging behind a sluggish 2008, effects of the global economic downturn are likely to be felt more this summer and fall. So the question on everyone’s mind is exactly what is going to happen in 2009?

In the past we produced forecasts of job trends and have now updated them in light of the current economic picture. There are two forecasts – the predictive or most likely case, and then there’s the lower limit or the worst-case scenario. In the predictive forecast for 2009, jobs in Bermuda will fall marginally from 40,068 in 2008 to 40,037, essentially no change (see Table 1 below). There is some variance between industries with the Finance sector showing the greatest decline (5%) followed by the Real Estate sector (3.4%), but with the Public sector showing an increase of 3.3%.

The lower limit forecast shows a gloomier picture with job losses for 2009 estimated at approximately 3,400 or 8.5% less than current levels. Using employment income at $75,000 again, income lost through job losses would reach $254 million or 4.3% of the estimated Gross Domestic Product (GDP) for 2009 of $5.86 billion. Such a scenario would have far reaching effects on Bermuda’s economy. However, it is also unlikely to come to fruition given that there have been some sprouts of stabilization in the US of late. In addition, Bermuda’s economy has weathered other storms and its built-in, Teflon-like resilience could help us to pull through once again. The real outcome for Bermuda may therefore lie closer to the predictive forecast. The best advice that can be given is similar to that given during approaching hurricanes – hope for the best but be prepared for any eventuality!

Download the full press release here.

(Data Sources: The Bermuda Sun, The Ministry of Finance, The Royal Gazette, The Statistics Department, and information provided by the general public.)

Profiles Managing Director meets renowned CNN political correspondent Roland Martin