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2000 |
2001f |
| Gross Domestic Product |
13.8 |
1.5 |
| real |
5.6 |
1.2 |
| Consumer Price Index |
3.0 |
1.6 |
| Personal Income |
4.6 |
3.9 |
| real |
1.6 |
2.3 |
| Personal Disposable Income |
4.6 |
4.5 |
| real |
1.5 |
2.8 |
| Retail Sales |
7.1 |
6.5 |
| real |
3.3 |
5.0 |
| Housing Starts |
6.4 |
8.7 |
| Employment |
-0.1 |
3.2 |
| Labour Force |
-0.4 |
2.8 |
| Unemployment Rate (%) |
16.7 |
16.4 |
| Population |
-0.6 |
-0.6 |
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f: forecast, Department of Finance, October 2001
Source: Department of Finance; Statistics Canada
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Economic performance in 2001 has generally been positive. Employment should reach a record high of about 211,000 and the unemployment rate should drop to 16.4%, the lowest since 1989. Consumer confidence remains high. Retail trade in the first eight months was up by over 8%, driven by strong employment growth, wage increases, tax cuts, and low interest rates. Lower than projected energy prices have kept inflation in check with the year-to-date CPI up by 1.7%, below the Budget forecast of 2.2%. Housing starts are expected to approach 1,600, the best performance since 1997.
Real GDP is expected to come in less than the Budget forecast due to weaker than expected production of iron ore, newsprint, fish products and crude oil. For most commodities poor market conditions have been compounded by the September 11 terrorist attacks.
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For regularly updated forecasts visit our web site.
GDP: www.economics.gov.nl.ca/frcstGDP.asp
Employment: www.economics.gov.nl.ca/frcstEmp.asp
Selected Indicators: www.economics.gov.nl.ca/frcstSel.asp |
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This is expected to negatively impact export-oriented industries such as the fishery, newsprint, mining, and information technologies for the remainder of 2001 and the first half of 2002. Crude oil production is expected to be less than forecast at Budget time due to lower than expected output at Terra Nova. Capital investment this year is expected to
decline by 3.5% due, in large part, to the winding up of the Terra Nova development phase and the completion of several major health care facilities. Investment, however, should remain above $3 billion for the third straight year. Preliminary population estimates indicate a decline of 0.6% in 2001 due to continuing net out-migration. The Province’s population in July 2001 was 533,761.
Private sector forecasters are expecting real GDP growth on average to be 4.5% in 2002, the fourth strong year since 1997. Growth in 2002 will be concentrated in the oil industry. The expectations behind this include higher oil production; the startup of White Rose development; and higher exploration activity. Consumer confidence and spending are expected to remain high, driven by major project developments, employment growth, and wage gains. Stronger US and Canadian growth in the second half of next year should allow recovery to begin in export-oriented industries.
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White Rose (Offshore oil)
Pending approval, construction should begin in 2002. See
Oil & Gas
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Voisey’s Bay (Mining)
An agreement among major stakeholders could see construction begin as early as 2002. See
Mining
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Labrador Power (Hydroelectricity and aluminum)
Government, Newfoundland and Labrador Hydro, and Alcoa are undertaking a joint feasibility review for development of the Lower Churchill Hydro Project and aluminum processing capacity. The results of the feasibility review are expected in November 2001.
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Hebron-Ben Nevis (Offshore oil)
A Development Application is expected in 2002. See Oil
& Gas |
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