A not-so-white-hot economy: Why St. John’s is cooling way down
Signs point to an economic lull, or maybe it's just back to business as usual
Signs have been popping up lately — some big, some small — but all point to what looks like a bit of an economic slowdown.
It's the talk of the town, and everyone seems to have a story. People are saying they feel there’s a dip in their local business, or there's a slowdown in moving products that used to fly off shelves. Even people who sell tables for charity fundraisers say they’re having a much harder time.
On paper, though, all the indicators remain pretty good.
But when you tie these stories — or maybe they’re still just dots — all together, you wonder, is there actually something to the talk of a slowdown? Or are they red herrings in a sea of wealth?
Oil prices
"We've all seen what is happening with oil prices, and oil prices are a significant part of our revenue, and we are held hostage by that," he said.
He's right. Brent crude fell to a four-year low on Thursday.
We have an oil-dependent economy and as prices fall so to does the amount of money government will have to spend on social programs and infrastructure.
Real estate
What was a booming real estate market has flattened out and turned to a buyer's market.
"We've come through an aggressive growth cycle over the past five years," said Chris Janes, the senior market analyst with the Canadian Mortgage and Housing Corporation.
"It's not sustainable for the market to continue at that level and so that's where we appear to be now … more in the downward slope, I guess, of that cycle for lack of a better term."
An important point: Janes said that although home sales and starts are down from the go-go market of 2012, things are still quite stable.
Sitting empty
On the condominium side of things, new condo after new condo is sitting empty and unsold.
Janes has a word to describe the condo market: "oversupplied."
Perhaps smelling the winds of change, the planned condos for the old Newfoundland Telephone building in downtown St. John's are now instead being listed as an executive rental project.
Across the road, the empty former CBC building is still slated as a condo project named Marconi. Online, Marconi refers to itself as a perfect example of revitalizing a historical building and creating it into beautiful, upscale living spaces. For now, the project is still pending.
For lease
Also empty: an increased number of shop vacancies in the downtown with 'for lease' signs in their windows.
On top of the regular ebb and flow of businesses opening and closing, downtown St. John's recently pinned some of the extra vacancies on last year's rotten winter and high rental rates.
CBC also heard plenty from our audience about how difficult it is to find parking downtown. Some of the problem is mitigated by two new parking garages, one next to the old CBC building on Duckworth Street, the other at 351 Water St.
Other signs
On Thursday night, the second-longest sellout streak in AHL history came to an end, when the IceCaps hosted the Hamilton Bulldogs.
Team president and CEO Danny Williams said it was because the general public didn't know there were tickets available because of all the sellouts.
I get his point, but you have to wonder: what happened to all the season-ticket buyers who were filling all those seats? It makes you wonder about how people are choosing to spend their money.
Taking a breather
Nancy Healey, the chief executive officer of the St. John's Board of Trade, told me that after years of growth, it's as if everyone is taking a breather.
"There is a slight slowing down going on right now," she said. "But it's not something that wasn't expected."
She said a lot of the boom was driven by construction.
"Once you get these construction projects completed, there is going to be a bit of a lull from that. But [with] the medium and the longer term, we're quite bullish. We're quite optimistic that things are going to be quite vibrant," said Healey.
Down the road, Healey says she's confident that the 400 jobs from an up and running Long Harbour, oil from Hebron and Labrador mining will keep the economy running strong.
But, just in case, the board says its trying to make its own preparations for the long run.
"The biggest concern that we have as an organization is that what often follows a boom is a bust, and we so want to avoid that," said Healey.
ABOUT THE AUTHOR
