February 27, 2009
Economic Snapshot — February 27, 2009
St. John’s lays claim to title of hottest job market in Canada
By John Clinkard, Consulting Economist, CanaData
It is not often that a city in the Atlantic provinces can lay claim to the title of hottest job market in the country. However, St. John’s, Newfoundland, at 6.7% employment growth in January, was faster than all the other CMAs in Canada. The only exception was Regina, Saskatchewan, where the rate of employment growth was also 6.7%.
The 6.7% figure looks even better when compared to the 0.6% decline for the country as a whole.
Over the past year, the major job generators in St. John’s have been health services (+4,000); wholesale and retail trade (+3,200); education services (+1,300); and construction (+500).
Gains in these industrial categories have offset job losses in management services (-1,000); professional and business services (-700); manufacturing (-600); and accommodation and leisure services (- 500).
Indeed, sustained growth of employment, accompanied by solid gains in net migration over the past two years, has increased housing demand significantly in the metro area. Housing starts in the St. John’s metro area are up by 25.9% in 2008, their strongest showing in more than 25 years. However, there are signs that employment has peaked and housing demand is starting to cool. Since October, total employment in St. John’s has shrunk by 2,800 jobs and that has contributed to a slowdown in home sales and an increase in the ratio of home sales to listings.
Looking forward, although economic activity in St. John’s will probably weaken significantly over the course of 2009 as economic activity contracts across North America, the rate at which it slows should be moderated by a number of key factors.
According to the Atlantic Provinces Economic Council, spending on major investment projects — including the $3.5 billion ongoing expansion of the White Rose oil field and the start of construction on the $2.2 billion Vale Inco processing facility — will help to support the local economy.
Moreover, the positive effect of these projects will be augmented by the recently announced $800 million investment in infrastructure by Premier government. This fiscal stimulus should help to offset the effect of Harvest Energy’s recent announcement that it plans to postpone expansion of its Come By Chance oil refinery.
John Clinkard has over 30 years experience as an Economist in international, national and regional research and analysis with leading financial institutions and media outlets in Canada.
Employment Growth: St. John’s, Newfoundland vs Canada
Data source: Statistics Canada/Chart: Reed Construction Data – CanaData.
