The report, released Thursday, (June 28) predicts that, despite expected double-digit construction growth in 2012, reduced production from maturing oil wells will limit overall growth in the province, although less so in St. John’s.
St. John’s gross domestic production is forecast to grow to $8.9 billion this year, up 1.1 per cent from 2011, a dropoff from growth of 5.4 and 6.9 per cent in 2011 and 2010 respectively.
“Much of the slowdown can be blamed on weaker primary and utilities output, expected to fall in line with lower offshore oil production,” reads the report.
“Lower growth is also expected in non-commercial services and in public administration and defence as government spending is reined in.”
While non-residential construction is forecast to have “another banner year,” according to the report, the housing market is starting to feel the impact of a slower economy, resulting in a reduction in housing starts this year and next.
The provincial economy is expected to barely move the needle on the growth next year, says the Conference Board, which forecasts 0.5 per cent growth in Newfoundland and Labrador’s GDP, to $18.1 billion.
Maintenance on the Terra Nova and White Rose will cause a double-digit drop in production this year, and sagging Hibernia production means a 17 per cent drop in output for the mineral fuels industry in 2012.
Even with a full year of prod-uction from Terra Nova and
White Rose in 2013, the industry is still forecast to contract 1.4 per cent.
On the bright side, the report says growth in mining and construction will boost wages and salaries and spur job creation.
But the report also warns of potential problems on the Lower Churchill: “Opposition to the Muskrat Falls hydroelectric project could push back its development schedule, dampening growth in the construction industry.”
The Conference Board’s report is slightly sunnier than a recent report from the City of St. John’s, released two weeks ago. In it, GDP is forecast to grow 0.8 per cent this year.
The Telegram
