Consumer Optimism Supports Commercial Activity

Investment associated with major project activity continues to be supported by strong wage growth and general consumer and business optimism in the St. John’s Census Metropolitan Area (CMA).

Employment gains, combined with significant increases in wages and salaries, are expected to boost personal income by 6.5 per cent in 2013 in the CMA. Retail trade is expected to increase by 3 per cent in tandem with income growth. Employment is forecast to increase 0.5 per cent in 2013, with the unemployment rate expected to fall to 6.5 per cent. The population of the St. John’s CMA is expected to grow by 1.5 per cent in 2013 to 203,600.

“Continued growth in personal income and retail trade illustrate optimism in the local economy,” says Mayor Dennis O’Keefe. “Major project investment continues to benefit the area and is reflected in this positive economic outlook.”

Real GDP growth in the CMA is expected to rebound as oil production recovers from last year’s extended maintenance shutdowns in the oil industry. Growth in spin-off activity related to the Muskrat Falls and Hebron projects will also ramp up. Real GDP in the St. John’s CMA is expected to increase by 6.3 per cent in 2013 to over $13.9 billion. Oil production is expected to total 84.4 million barrels in 2013, a 16.9 per cent increase from 2012.

The offshore oil industry has been the main driving force behind strong economic growth in the St. John’s CMA over the past 15 years. The CMA is the primary supply base for the offshore oil industry and the number of local businesses providing support services continued to increase over the last decade.
In the St. John’s CMA, oil activity directly accounts for about 40 per cent of nominal GDP, up from about 34 per cent in 2002. Direct oil industry employment in the CMA was estimated at 2,700 person years (2.5 per cent of CMA employment) and earned (labour) income from these direct jobs is estimated at over $350 million in 2012. The total employment impact of the offshore oil industry in the CMA, including direct, indirect and induced employment, is estimated at roughly 9,000 in 2012 or 8.2 per cent of total CMA employment.

“The oil industry clearly plays a vital role in the City’s economy,” says Ward 3 Councillor Bruce Tilley, Chair of the Economic Development and Tourism Standing Committee. “The addition of new projects and developments in this sector will continue to have a positive influence on economic growth in St. John’s.”
 
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 (Office of Strategy & Engagement), June 2013. The full report (2013 Economic Outlook) is 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