Issues in the Oil and Construction Industries to be Neutralized by Growth in Service Sector
Greater St. John’s doesn’t have a great economic outlook for 2015, but a 0.3% forecasted growth in GDP is better than being in the negative (which the province is, also by 0.3%). Employment is also up by 0.3%.
“The Economic Outlook 2015 is projecting modest growth for the local economy here in the City,” said Mayor Dennis O’Keefe. “Despite slight declines in some areas, overall we are headed in a positive direction, with real GDP and household income showing modest increases.”
Decreases in the oil and contraction industries are expected to be offset by growth in the service sector.
“With the current economic conditions being impacted by lower oil prices, we would expect to see some declines,” said Councillor Bruce Tilley Co-Chair of the Economic Development, Tourism and Public Engagement Standing Committee.
“I am pleased to see that despite weakening in some areas, major project development and associated investment will continue to generate substantial economic activity this year.”
City Receives an A+ Credit Rating
The City of St. John’s has just received a positive credit rating of A+ from international credit rating agency Standard and Poor’s. Consistent with previous ratings, the City feels “this demonstrates the City’s commitment to prudent fiscal management.”
“The City recently released its $1.25 billion dollar capital plan. As the City borrows to finance these projects our positive credit rating will help keep costs down for taxpayers,” says Councillor Danny Breen, Chair of the Finance and Administration Standing Committee.
“The report is evidence of our strong economy, strong budgetary flexibility and very low contingent liabilities. Fiscal responsibility is a pillar of our strategic plan and this rating affirms our commitment to this value.”
In addition, the report indicates that St. John’s economy will continue to grow due to large capital investments in the offshore oil industry and their sectors, leading to continued high employment and personal incomes in the next two years.
The Standard and Poor’s report states that “St. John’s demonstrates satisfactory financial management practices, in our view. We consider St. John’s debt and liquidity management to be prudent with conservative borrowing practices.”
Youth Under Employment Still a Problem, but Better Than National and Provincial Average
The youth unemployment rate in the St. John’s – for people aged 15-24 – has been steadily trending downward over the last decade, falling to 10.4% in 2014, putting us below the national average of 13.5%.
The rate of youth unemployment in Canada has historically been higher than that of the general labour force (due to the age group’s relative lack of mobility, training, and experience). The City’s recent report suggests that the Newfoundland and Labrador youth unemployment rate has been steadily improving since peaking at 32.4% in 1984. At 10.4%, our youth unemployment rate is better than the national average, as well as the average in other NL municipalities.