Labour Force Gains Boost St. John's Economy
Increases in employment, wages and general optimism with respect to future major projects continue to boost economic activity in the St. John’s Census Metropolitan Area (CMA).
In 2012, employment in the CMA increased by 3.6 per cent (or 3,800 jobs). The labour force increased by 4.3 per cent (or 4,900), due to a significant increase in the participation rate. The participation rate (the proportion of the working age population who is either working or looking for work) increased sharply in 2012, reaching a 17-year high of 72.3 per cent. With labour force growth outpacing employment growth the unemployment rate in the CMA increased by 0.6 percentage points to 7.2 per cent, which is still low looking at historical context.
“Our labour market continues to perform exceptionally well,” says Mayor Dennis O’Keefe. “The labour force participation rate in the St. John’s area was the sixth highest in Canada in 2012 and this is a clear indication of the confidence people have in the St. John’s economy.”
Strong employment growth and wage gains boosted labour income, and personal income
increased by 7.8 per cent to $8.8 billion in 2012. Retail sales are estimated to have increased by 6.9 per cent.
“The increase in retail sales points to strong consumer confidence throughout the region,” says Ward 3 Councillor Bruce Tilley, Chair of the Economic Development and Tourism Standing Committee. “This is a strong indicator that the economy in St. John’s continues to move in the right direction and we are very pleased to see the 2013 forecast also trending in a positive upward direction.”
The population of the St. John’s CMA increased by an estimated 1.3 per cent last year. The CMA population has increased steadily over the past decade and now stands at over 201,000. It is estimated that since 2001, when the 1990s trend of population decline bottomed out, the population of the St. John’s CMA has increased by more than 11 per cent.
Real Gross Domestic Product (GDP) attributed to the St. John’s CMA is estimated to have declined by 0.4 per cent in 2012 to $13.95 billion (in 2007 dollars). The overall decrease was due entirely to the roughly 21 per cent decrease in oil production last year. Excluding the oil and gas industry, the CMA’s 2012 real GDP increased by 6.3 per cent. Gains outside of oil production were primarily due to increased capital spending and employment related to major project development, namely the Long Harbour nickel processing facility and the Hebron offshore oil project.
Outlook for 2013
Economic growth, as measured by real GDP, is expected to increase again in 2013 due primarily to gains in exports stemming from higher oil production. Domestic demand is expected to continue to be robust as major project investment remains high. Construction activity at the site of Vale’s nickel processing facility in Long Harbour will be completed in 2013, but the Hebron and Muskrat Falls developments are expected to ramp up significantly. In addition to the gains in oil production, other private sector industries related to this investment, such as construction; professional, scientific and technical services; and wholesale and retail trade, are all expected to do well in 2013. Increased employment and income will bolster consumer spending and retail trade is also expected to again record steady growth.
Note: The St. John’s Census Metropolitan Area (CMA) is a Statistics Canada geographically defined area including St. John’s and neighbouring communities.
Data prepared by Government of Newfoundland and Labrador, Department of Finance (Economic Research and Analysis Division) and the City of St. John's (Department of Economic Development, Tourism & Culture), January 2013. Full report (2012 Economic Review) available online in the publications section at www.stjohns.ca.
For further information:
Jennifer Mills
Communications Officer
City of St. John’s
Phone: (709) 570-2037
Cell: (709) 690-7586
E-mail: jmills@stjohns.ca
Dennis O’Keefe
Mayor
City of St. John’s
Phone: (709) 576-8477
E-mail: dokeefe@stjohns.ca
Bruce Tilley
Ward 3 Councillor
Chair, Economic Development and Tourism Standing Committee
City of St. John’s
Phone: (709) 576-8643
E-mail: btilley@stjohns.ca