Reduced oil production, construction affect pace
St. John’s will see a slowdown in gross domestic product (GDP) growth in 2014, according to a new report from the Conference Board of Canada.
The board released its Winter Outlook on Tuesday, forecasting 1.7 per cent economic growth this year, cooling off from 2013’s six per cent — second of the 28 metropolitan areas the report examines.
The report notes higher offshore oil production helped boost growth last year, with wells that had undergone maintenance in 2012 coming back online. But the completion of the Long Harbour plant will mean a decline in construction this year for the first time since 2007, says the report.
“With several wells coming back on line last year and some increase production, what we saw was that help to drive the overall economy,” said Jane McIntyre, senior economist with the Conference Board of Canada, on Wednesday.
“The other thing that was helping drive the economy last year was construction growth, mostly on the non-residential side. There were lots of projects across the city — the airport renovations, Metrobus terminal, Fortis building, all those kinds of things.”
This year will see some natural production declines, says the report. “The other thing is after reaching that peak construction on all those big projects, this year a lot of them are winding down and finishing up, especially the Vale plant,” said McIntyre. “What we’re looking at is construction to delcine this year for the first time since 2007. Those factors are holding back overall growth in the economy.”
The report forecasts the city’s unemployment rate to drop from 6.3 per cent in 2013 to six per cent this year, and to continue trickling downwards, while total employment increases to a plateau of between 111,000 and 112,000 in 2016, up from 108,000 this year. Per-capita income is forecast to increase 3.1 per cent this year, to $43,899, and the report predicts the metro area’s population to grow from about 203,000 in 2013 to 212,000 in 2018. At the same time, the report forecasts the overall provincial population to grow by just a few thousand over the same time period, which would mean a shrinking population outside of the St. John’s area.