The City of St. John’s has released the 2023 Economic Review, its annual report on economic indicators for the St. John’s Census Metropolitan Area (CMA).
“Our economy showed signs of improvement in many indicators last year,” said Mayor Danny Breen, Council Lead for Economic Development. “The population grew, retail sales increased, unemployment is down, household income is up, and the St. John’s economy is expected to return to growth in 2024.”
Key indicators
- The St. John’s Census Metropolitan Area (CMA) economy experienced modest growth in 2023, with most economic indicators holding steady.
- The St. John’s CMA’s economy, excluding oil and gas extraction, is estimated to have increased by 0.8%, driven by increased employment in the public sector and construction activities related to the Terra Nova offloading vessel refit and the West White Rose project. Overall, real GDP decreased slightly (-1.3%) primarily due to lower oil production.
- The St. John’s population grew again in 2023, with the CMA population estimated to be 223,667, a 2.1% increase from 2022.
- Household income increased by 5%, to $12.3 billion due to significantly higher wages and increased government transfers.
- Retail sales increased by 4.1% to $4.8 billion, mainly due to higher consumer prices caused by inflation.
- Inflation moderated throughout the year. The Consumer Price Index averaged 3.7% in the St. John’s CMA in 2023, down from a 32-year high of 5.9% in 2022.
- New housing construction decreased by 33.4% to 488, as higher interest rates and elevated construction costs lowered the demand for new residential investment.
- Employment remained steady in the St. John’s CMA in 2023 with the unemployment rate falling to a seven-year low of 6%, as the labour market continued to tighten throughout the year.
Outlook for 2024
The St. John’s CMA economy is expected to return to growth in 2024. Oil production is expected to rebound; construction activities associated with the West White Rose project are anticipated to ramp up; and spinoff effects from increased oil production are anticipated to increase economic activity in many service sector industries in 2024. However, persistent inflation may force the Bank of Canada to delay interest rate cuts; this has the potential to further reduce consumer spending, investment, housing starts, and residential construction activity within the region.