St. John's City Hall. — file photo
Major-project investment is making consumers and businesses optimistic about the St. John’s economy, according to data released by the City of St. John’s.
The report, released last week, said employment gains, coupled with wage and salary increases, are expected to drive personal incomes up 6.5 per cent in 2013 in the
St. John’s census metropolitan area, and lifting retail trade three per cent. Employment is forecast to increase 0.5 per cent while the unemployment rate is predicted to drop to 6.5 per cent.
Coun. Bruce Tilley, chairman of the city’s economic development and tourism standing committee, said there’s no question oil drives the economy in the province, and he pointed to the upbeat mood at last week’s Noia conference, which draws hundreds from the oil and gas industry.
He said he spoke to several businesses and other industry representatives, all of whom were enthusiastic about the area’s prospects.
“They’re so positive about here it’s not even funny,” he said. “In fact, a number of them will be moving here over the next year as the offshore goes forward.”
He said he’s not worried about the economy being too dependent on oil.
“There’s always fluctuations with respect to anything, whether it’s oil and gas or whatever,” he said.
“What I look at too, is we have a strong tourist industry, for example. Our tourism industry has really rebounded over the last couple of years, and I know in St. John’s in particular, they estimate that it’s worth about $350 million worth to the economy. And so the hospitality industry’s doing extremely well, and other components, the fishery, is doing very good. But there’s no question about it, we’re very dependent on the offshore.”
The airport strike does give him a little pause, though.
“That particular strike, certainly we’ve lost some conventions with respect to that. I don’t know how much longer this thing will go on, but my understanding is that basic airport travel is holding its own. … Hopefully they’ll get something done with that. It’s been long enough now.”
The report notes that in the St. John’s area, oil activity accounts for about 40 per cent of nominal GDP, up from 34 per cent in 2002.
Total employment of the offshore industry in the St. John’s area, according to the report, is estimated at about 9,000 person years, or about 8.2 per cent of total employment.
With the oil industry forecast to rebound after a steep drop in production last year, GDP growth is forecast to improve in tandem.
“Growth in spinoff activity related to the Muskrat Falls and Hebron projects will also ramp up,” reads a statement from the city.
“Real GDP in the
St. John’s Census Metropolitan Area 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.”