News

There are definite signs, mid-way through the final quarter of 2011, that the wind is filling the sails of Nova Scotia’s economy.

The most visible indicator of this improvement is the fact that the province’s unemployment rate has trended steadily lower since the beginning of the year and is now at its lowest level since March of 2010.

More significantly, over the past three months, full-time employment in Nova Scotia has increased by 7,500. This increase in full-time employment appears to be largely due to strength in transportation services, professional services and education, which has more than offset losses in manufacturing, forestry and finance and insurance.

Nova Scotia’s stronger pattern of full-time job growth appears to be, in part, due to a solid gain in exports. Despite the relatively lacklustre pattern of growth in the U.S., the market for 72% of the province’s foreign sales, Nova Scotia’s total exports in the three months ending in August of this year are up by 15% compared to the same period in 2010.

This acceleration in external demand has been accompanied by a moderate strengthening in domestic demand reflected in part by stronger retail sales. They are up by 4.6% year over year in the three months ending August 2011 versus the same period in 2010.

This strengthening in consumer spending has been complemented by a recent pickup in both residential and non-residential construction. In the case of new housing, the total value of residential building permits in the three months ending in August is up by 24.5% compared to the prior three months. Moreover, due to very strong gains in the industrial and commercial categories, the total value of non-residential building plans in the three months ending August is up by 42% vs. the previous three month period.

Looking forward, the province’s economic prospects over the next several years took a decided turn for the better following the federal government’s announcement on October 19, that Irving Shipbuilding had been awarded a $25 billion federal government contract to build 15 warships and six patrol boats.

According to the Greater Halifax Partnership, revenue from this project will add more than 2 percentage points annually to the province’s GDP, create 11,500 direct and indirect jobs and generate over $250 million in tax revenue over the next 20 years.

In addition, late last year, Nalcor Energy owned by Newfoundland and Labrador and Emera Inc. owned by the province of Nova Scotia agreed to proceed with the construction of the Lower Churchill Generating Project. According to the province of Nova Scotia, once up and running, the facility will provide cheap electricity to the province and also help attract energy intensive manufacturers.

While these projects will have limited impact on the province’s very near term economic outlook they will definitely brighten Nova Scotia’s prospects over the medium and longer term.