The oil and gas industry is enjoying continued expansion with construction activity on the Terra Nova project nearing its peak and Hibernia production expected to be up by nearly 50%. The fishing industry is also enjoying increased quotas of cod, crab and shrimp, and substantial increases in crab prices. Bolstered by events like the Canada Winter Games and Soiree ’99, the number of visitors to the Province is expected to increase by over 8% this year. Newsprint shipments are expected to be up by 24% this year as production rebounds from depressed levels that resulted from last year’s strike at Abitibi-Consolidated.

The latest survey of investment intentions by Statistics Canada indicates that, if firms follow through on their intentions, investment spending in the Province will increase by 29.2% this year. Rising business confidence, oil and gas development, and public infrastructure projects are spurring capital spending. 

Increased economic activity has translated into more jobs. Employment in the first ten months rose 5.3% compared to the same period last year. As a result, the annual average level of employment is now expected to grow 5.1% to 207,900—the highest employment level ever achieved in the Province. The unemployment rate for the year is expected to be 17.1%, down from 17.9% last year, and the lowest since 1990.

Strong employment gains together with wage growth and healthy consumer confidence means the consumer sector is also performing strongly. Retail sales in the first eight months were up by 6.8%.

The economic forecast issued in March (contained in The Economy 1999) has been revised and the new forecast is shown in the table. Growth in most indicators such as personal income, employment and retail sales has been revised upward. However, the forecast for real GDP growth for 1999 remains at 5.0% since growth in the volume of oil production is now expected to be lower than in March.

The latest St. John’s Board of Trade member survey indicates that business confidence is high in the Province. Statistics Canada’s help wanted index suggests that firms want to expand and hire more workers. The help wanted index, a leading indicator of future employment growth, has trended upward through 1999 and is now at its highest level in eight years.

Click on chart to enlarge view

Prospects for future growth are enhanced by a recent KPMG International study which ranked St. John’s as one of the most cost-effective cities in the industrialized world in which to locate a business. Cost is a key criterion in business location decisions and the KPMG study will facilitate efforts to attract firms to the Province.

In future, emerging sectors such as tourism, IT, and value-added manufacturing are expected to continue their growth. There are also strong prospects for further expansion in the fishery, future oil developments, and the development of Labrador Power and the Voisey’s Bay base metals deposit. These factors enhance the outlook for the provincial economy in 2000 and beyond.