January 8, 1999
(Human Resources and Employment)
(Finance)

Province ends year on high note

Newfoundland and Labrador has recorded its strongest year of economic and employment growth this decade. The province experienced real GDP growth in 1998 of an estimated 4.4 per cent, and the lowest unemployment rate since 1990.

"This strong economic growth was led by the offshore oil industry, growth in the fishery, increased construction activity, as well as increases in consumer spending," said Finance Minister Paul Dicks. "This past year marked the first full year of oil production at Hibernia. Activity in the construction industry included hospital developments, the St. John's civic centre, road construction, the university centre, the Terra Nova project and various commercial developments. The volume of fish landings was up by 26 per cent in the first 11 months of the year. Retail trade in the first 10 months of 1998 showed growth of 3.4 per cent."

EMPLOYMENT GROWTH STRONGEST IN 1990S

The province has also recorded the strongest job growth since 1989. Statistics Canada's Labour Force Survey for December shows that in 1998, monthly employment averaged 197,900 which was a gain of 6,000 jobs or 3.1 per cent from 1997.

"It is evident that the stronger economy is supporting greater levels of employment," said Human Resources and Employment Minister Julie Bettney. "More and more people are finding jobs here in Newfoundland and Labrador. In fact, our social assistance case load continues to decline, and is now at a level comparable to five years ago."

Ms. Bettney noted an improvement in the annual average unemployment rate in 1998. "The unemployment rate declined by 0.9 percentage points from 18.8 per cent in 1997 to 17.9 per cent in 1998. This is the lowest it has been since 1990."

"While there was some slippage in seasonally adjusted employment numbers from November to December of 1998, there was a year-over-year actual gain in December of 3,100 jobs," said Minister Bettney. "This translates into an increase of 1.6 per cent, which builds on the 4.8 per cent growth in December 1997. This amounts to 6.5 per cent more people employed in December 1998 than there were in December 1996, bringing the job gain over the last two years to nearly 12,000."

Minister Bettney did note, however, that while the unemployment rate was up by 1.3 percentage points over December of last year, this can be explained by the significant increase in the province's labour force. "About 7,400 more people entered the labour market. As more people see their friends and neighbours obtaining jobs it encourages them to resume or begin to actively search for work. If more people enter the labour market than actually find jobs in a given month, the unemployment rate will rise."

"We are hopeful of further improvement in the economy in 1999," said Minister Dicks. "Economic forecasters expect the province to continue to experience strong economic growth for a second consecutive year. Some forecasters expect Newfoundland and Labrador to record the highest growth among the provinces. This would certainly encourage job growth and improve our unemployment rate."

Media contact: Karen Kelloway (709) 729-4062.

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FACT SHEET:  1998 ANNUAL AVERAGE LABOUR MARKET INDICATORS

LABOUR FORCE 1998:
            -      The size of the labour force increased by 2.1 per cent in 1998, stronger than the growth of 1.8 per cent recorded for Canada as a whole.

            -      There were some 4,900 more people in the labour force last year, on average, than there were in 1997. The increase provides a good indication of the                      extent to which confidence in the ability of labour markets in the province to provide jobs has improved.

            -      Only two provinces, Ontario and Alberta, had stronger growth in the labour force than Newfoundland and Labrador.

EMPLOYMENT 1998:
            -      The growth of 3.1 per cent in the province's employment was stronger than Canada's growth (2.8 per cent), and stronger than all other provinces except                      Ontario and Alberta.

            -      It was also the strongest annual average employment growth yet to be recorded during the 1990s (strongest since 1989 when employment grew by 3.7                      per cent), a fact which is consistent with the GDP growth figures (4.4 per cent in 1998, strongest during the 1990s).

UNEMPLOYMENT RATE 1998:
            -      The unemployment rate averaged 17.9 per cent during 1998, the lowest it has been since 1990 when it averaged 17 per cent

            -      The decline of 0.9 percentage points in the unemployment rate matched the decline at the national level.

PARTICIPATION RATE 1998:
            -      This indicator measures the proportion of the labour force age population that is either working or actively looking for work.

            -      At 54.1 per cent in 1998, this was up 1.6 percentage points from 1997, and it was the highest it has been since 1991.

EMPLOYMENT POPULATION RATIO 1998:
            -      This is a good indicator of labour market performance since it measures the percentage of the total population 15-64 that is actually working.

            -      The ratio averaged 44.4 per cent during 1998, up 1.8 percentage points from the previous year and the highest it's been since 1991 despite the fact that                      many of the jobs lost in the fishery since 1992 have yet to be recovered.

SUMMARY OF 1998 ANNUAL AVERAGE LABOUR MARKET INDICATORS
                                    1997              1998           Change

Labour Force              236,200          241,100        4,900
                                                                            (2.1%)
Employment                191,900          197,900        6,000
                                                                            (3.1%)
Unemployment           44,300            43,100          -1,200
                                                                              (-2.7%)
                             Unemployment Rate   18.8%             17.9%            -0.9 (Percentage Points)

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FACT SHEET

LABOUR MARKET INDICATORS - DECEMBER 1998 COMPARED TO DECEMBER 1997

LABOUR FORCE - DECEMBER 1998:
            -    The 3.2 per cent increase provides a strong indication of improved confidence in the ability of labour markets in the province to provide jobs - there                     were 7,400 more people in the labour market during the last month of 1998 than there were in the same month of 1997.

EMPLOYMENT - DECEMBER 1998:
            -      Both seasonally adjusted and actual employment rose by 1.6 per cent in December 1998 compared with December 1997.

            -      In the case of actual employment, the growth of 1.6 per cent followed 4.8 per cent growth in December 1997 compared to the same month in 1996.

            -      In other words, 6.5 per cent more people were employed in Newfoundland and Labrador in December of 1998 than there were in the last month of                      1996.

            -      Within Atlantic Canada, only New Brunswick recorded stronger employment growth than this province.

UNEMPLOYMENT RATE - DECEMBER 1998:
            -      The unemployment rate rose because the 1.6 per cent increase in employment could not fully absorb the 3.2 per cent increase in the labour force, that is                      in the number of workers looking for jobs.

            -      Employment increased by 3,100 while some 7,400 more people were looking for work. Therefore the number unemployed rose by about 4,300                      causing the unemployment rate to increase by 1.3 percentage points.

EMPLOYMENT POPULATION RATIO - DECEMBER 1998:
            -      This ratio rose by 1.1 percentage points in December 1998, matching the increase recorded at the national level.

            -      Within Atlantic Canada, only New Brunswick surpassed this performance.

1999 01 08                    3:30 p.m.