29 March 2010

No bubbles in sight: GDP dropped 26% in ‘09

The value of goods and services produced in Newfoundland and Labrador dropped 26% in 2009 compared to 2008.  Those figures are in an appendix to the finance minister’s budget speech delivered on Monday.

GDP in 2009 hit $22 billion compared to $31 billion in 2008. That’s only slightly above the GDP in 2005.   The single year drop erased the gains of 2006 and 2007 which together saw an increase in GDP of 27.9%.

Real GDP declined 8.9%.

In 2008, Premier Danny Williams claimed the province would be protected from the global recession by some unknown means.  He and finance minister Tom Marshall continue to claim the recession did not affect Newfoundland and Labrador as severely as it did other places.

Average annual employment in the province during 2009 remained below employment levels in 2006 and the current forecast is for negligible growth (one half of one percent) in the coming year.  Meanwhile the labour force remains swollen with returning migrants thrown out of work in other parts of the country by the recession. 

Wages and salaries in the province are higher, driven primarily by increases in the public sector.

Sales of manufactured goods (shipment value) were down 33% in 2009. Housing starts fell 6%.

Oil production hit 97 million barrels in 2009, compared to 125 million in 2008.  That’s basically the forecast production from Budget 2009.  Interestingly, the December financial update had forecast an increase in oil production to 101 million barrels.  Oil production is forecast to drop again – to 86 million barrels – in 2010.

Newsprint shipments in 2009 were down by 49% from 2008 and 66% from 2005.  The value of fish landings was down 19% in 2009, wiping out gains in the preceding two fiscal years.



Wm. Murphy said...

didn't TD and BMO say that NL would be going from worst to first in 2010. How does that jive with this "doom and gloom"

Oh I forgot to mention how out to lunch all of the community and association leaders are in praising the budget.

They must be completely dillusional in endorsing this budget. Shame on the recession and shame on the experts for giving a thumbs up on the budget. Shame!

Ed Hollett said...

Maybe you should try reading the post and appreciating that it talked about the claims made versus the actual performance of the economy in 2009.

As such, certain claims about performance in 2010 should be reviewed with great sketpcisim.

And if you read the Tuesday post you'd understand the need for grave concern.

BTW, one of them based their prediction on a non-existent project. So if you want to cotninue to believe fairy tales (as you obviously do) then by all means go right ahead.

Wm. Murphy said...

or maybe all of the supporters of the budget should try and read your posts.

It has nothing to do with what I believe. I am wondering why such the disconnect with what you claim and virtually all of the community leaders regarding this budget. What do you know that most of the other "leaders" don't know?

Why is that these people and the experts with BMO and TD, don't share your sketpcism? Why do you feel it necessary for me to share your grave concern when others do not share this view?

Ed Hollett said...

Well you might as well wonder why the mainstream media are refusing to cover Dunderdale six months after she blurted out that major news about the Lower Churchill. It should just suffice that they do. You can see the story based on her own comments and consider yourself to be better off for knowing more than the average bear.

I am most emphatically not the only one drawing attention to serious problems with the government's financial policy.

The AG has done a far better job and been ignored far more obviously. I pounded away it it for years before finally the finance minister - no less - wound up both agreeing with me (he said with tongue in cheek). And then he firmly refused to do anything but carry on with the same unsustainable program of excalating public spending. The debt is the same way.

Part of the problem in some cases is that people simply don't appreciate what is going on. They couldn't tell a cash deficit from an accrual deficit or whether either is fit to eat. The telly this morning published the accrual deficit/surplus but that is only part of the story. I appreciate they have a fixed amont of space in which to discuss complex issues.

But still, how many people know that the budget yesterday came down in two entirely different sets of books presented on two different bases?

In other cases, like the Board of Trade, they simply don't ever rock any boats. They offer up some platitiudes and away they go.

Then there are the various special interest groups all of whom benefit from your wallet and mine. They are hardly going to say there is a problem with so many jobs and other cash goodies being fed to them from the public tit.

As for the banks you ahevt o look at their projections and make a decision about them. They use much iof the same data as everyone else but they come to diffetrent conclusions. Sometimes they say completely silly things, like the bit about the Lower Churchill. They simply may not pay any serious attention to goings on in this little corner of the universe and so what they know is from one or two headlines.

Ed Hollett said...

To be sure, I went back and took a gander at the raw video of Zach Goudie's budget reaction piece for CBC. It's available on their website.

The budget reaction is mixed at best. The Board of Trade is concerned about the debt and deficit. The CFIB is concerned about the increase in public sector spending. Pensioners aren't really happy. The Federation of labour is generally happy but then I'd be surprised if they weren't given the massive public sector spending.

School federation is pretty much happy and there are a few more like that, but frankly it was a mixed bag of reactions by my take.

My earlier characterization of the reaction was off base.