Newfoundland labour markets showed solid improvement in 1995 as employment grew and the unemployment rate declined. Total employment increased by 1.4 percent from 195,000 in 1994 to 197,000 last year and the unemployment rate declined by 2.1 points to 18.3 percent. Employment in 1995 was the highest since the groundfish moratorium came into effect in 1992 and while total employment remains below the pre-recession peak of 206,000 recorded in 1989-90, employment outside of the fishing industry reached its highest level ever.

Newfoundland's labour force declined by 1.2 percent to 241,000 in 1995. This decline arose because of a 0.5 percentage point drop in the participation rate to 53.1 percent combined with a source population (15 years of age and over) that was virtually unchanged. The decline in the labour force combined with the gain in employment to produce a 6,000 drop in the number of unemployed and consequently the unemployment rate fell from 20.4 percent to 18.3 percent.

The Canadian labour market displayed slower growth in employment in 1995 than in the previous year as the economic expansion lost momentum. Consequently, employment growth was 1.6 percent in 1995 compared to 2.1 percent the year before. As the Canadian labour force expanded by just 0.6 percent, the national unemployment rate edged down by 0.9 percentage points to 9.5 percent.

In comparison to other regions of Canada, employment growth in Newfoundland in 1995 nearly matched growth at the national level. Excluding employment related to the fishery, growth in this province was second only to that of P.E.I. which enjoyed strong job growth due to construction of the fixed link with the mainland.

On an industry basis, employment gains in Newfoundland were experienced in Mining; Transportation, Communications and Other Utilities; Finance, Insurance and Real Estate; and Community, Business and Personal Services. The mining industry enjoyed a banner year due to unprecedented levels of mineral exploration and the excitement surrounding the Voisey's Bay discovery as well as an expansion of mining production. The service sector industries benefitted from the general upturn in economic activity, resulting in an employment gain of 5,000.

Industries which experienced declining employment in 1995 were Fishing, Wholesale and Retail Trade, and Construction. The fishing industry continued to be affected by the groundfish collapse as nearly 3,000 fewer fishermen reported employment last year. Employment in the Trade industry declined by nearly 1,000 following several years of weak sales volumes. Construction employment declined slightly despite an increase in Hibernia related employment as other components of the industry including residential and commercial construction performed poorly.

Of the four labour force regions in the Province (see map), only the Notre Dame-Central-Bonavista Bay Region experienced a loss of employment from 1994. This was the region most affected by the Northern Cod moratorium and is believed to be where much of the employment decline in the fishing industry was concentrated. Employment dropped by 2,000 or 4.9 percent in this region. While employment in the South Coast-Burin Region was unchanged, the West Coast-Northern Peninsula-Labrador Region achieved an increase of 1,000 or 2.4 percent, no doubt reflecting heightened exploration activity in the region.

Most of the employment gain last year was on the Avalon Peninsula where employment increased by 4,000 or 4.0 percent due partly to increased activity related to Hibernia. The gain in this region was evenly split between the St. John's CMA and the rest of the Avalon. The St. John's CMA, being less directly tied to the fishery and seasonal industries than other regions, has gained 8,000 jobs since 1992 and has the lowest unemployment rate in the Province at 12.6 percent. See Labour Market Facts in this section for more on the St. John's labour market.

Outlook

1996 is expected to be a difficult year for the Provincial labour market due to the winding down of Hibernia related jobs and government spending reductions. These factors will cause a downturn in employment in 1996 which will negatively impact spin-off related industries particularly the service sector. Employment gains in growth sectors such as mining, aquaculture, oil and gas exploration, tourism, and information technology will be insufficient to offset several thousand job losses expected elsewhere.