THE Isle of Man Government is doing its best to remain positive about the Manx economy with expansion in a number of sectors, but acknowledges that the Island’s important retail sector is still struggling.
The latest quarterly Economic Report to the Council of Ministers, released this morning, also says that there is “a mixed picture” for the construction industry which continue to rely on heavy government spending on capital projects.
But there are some bright spots within the economy, according to the report, which highlights the thriving clean tech sector. According to projections outlined in the report it looks set for further expansion.
The report says, “It is envisaged that opportunities in areas such as renewable energy and low-carbon technology will encourage more business to the Island and create new job openings over the next three years.”
The report covers the second quarter of 2011, from April 1 to June 30, and refers to a recent independent survey conducted by PricewaterhouseCoopers.
Its findings show that the Island’s clean tech cluster is currently home to more than 100 companies, with an estimated annual turnover of £4.6 million.
These businesses forecast their growth will rise to a turnover of £10.6 million (130% increase), a £1.2 million tax contribution (50% increase to Government) and a workforce of 125 employees (47% increase) by 2014.
In addition to the existing sector, a number of other clean tech companies have expressed an interest in relocating to the Isle of Man, citing the opportunities to trial new technologies as one of the main attractions.
The report also highlights the role played by the TT Zero clean emissions race, held for the past three years during the TT Festival, in raising international awareness of the Isle of Man as a leading advocate of eco-technologies.
It also points to the potential benefits to be derived from the ‘All Islands Approach’ to renewable energy generation agreed at the British-Irish Council Summit in London in June.
The Report adds, “This joint approach could allow renewable energy projects in Isle of Man territorial waters to supply electricity to the UK market which would generate a significant long term revenue stream for the Island from leasing the seabed for offshore development.
“Furthermore, significant opportunities exist for the Island as a central hub for interconnectors linking wind farms in the Irish Sea to the UK electricity grid.”
Elsewhere in the Manx economy, the report says there are positive indicators in the high-tech manufacturing sector, with Isle of Man companies winning some large contracts and witnessing a substantial increase in sales over the first half of 2011.
Rising energy prices remain a major challenge, but the Department of Economic Development is helping businesses to become more efficient through energy audits, the training of energy champions and investment in energy saving equipment and practices.
Interest in the Isle of Man Ship Registry continues to grow as the ‘clear message of quality and service at a reasonable cost’ becomes known to the new market of the Far East, as well as the traditional European client base.
Meanwhile, confidence in the fiduciary sector is said to be ‘anecdotally higher’ on the back of greater certainty over the Isle of Man’s zero/ten business taxation position.
Corporate and trust service providers are continuing to diversify their business models and remain ‘an important part of the engine room of the economy,’ while entry into the QROPS (Qualifying Recognised Overseas Pension Schemes) market will help to raise the profile of Isle of Man pension providers and add strength to the Island’s retirement solutions proposition.
The report concludes by saying that there is “a mixed picture” for the construction industry which continuing to report low levels of activity and a reliance on government capital projects.
One potential bright spot for building firms is the recent amendment to the House Purchase Assistance Scheme to assist first time buyers. It is hoped that the changes will enable more first time buyers to enter the housing market, and stimulate new builds and activity.
The retail sector is also facing challenging conditions, with sluggish sales attributed to falling levels of disposal income.
The report says that “while the Isle of Man economy remains in better shape than the UK, buying local is critical to the future success of local retailers.”
