Post by ferryfast admin on Nov 8, 2011 13:37:18 GMT -5
Impact of shipbuilding contract to be felt across N.S.
By Kim Covert, Postmedia News
November 7, 2011
Read more: www.canada.com/business/Impact+shipbuilding+contract+felt+across/5670089/story.html#ixzz1d8lY1DeE
It will take a little more than a year for Nova Scotia to start feeling the real benefits of a $25-billion contract to build naval vessels, but once they kick in the impact will be even greater than earlier estimates suggested, according to a report released Monday by TD Economics.
Nova Scotians were jubilant on Oct. 19 when the federal government announced Halifax's Irving Shipybuilding Inc. had won the contract, while Seaspan Marine of British Columbia had been awarded an $8 billion contract for coast guard vessels.
"It means young people can have a career staying here in Nova Scotia," Premier Darrell Dexter said when the contract was awarded. The province has estimated the project will create 11,500 jobs and almost $900 million real GDP during the peak production years of 2018-2020.
TD Economics has revised its own estimates of the project's short-term job-creation prospects upward.
"The most significant revision to our Nova Scotia forecast is recorded in 2013, when we assume the shipbuilding process gets underway and federal funds begin to flow," writes economist Sonya Gulati. "Relative to our September call, we have ratcheted up real GDP and employment growth by 0.5 and 0.7 percentage points, respectively. Put another way, this boost translates into an additional $228 million in real GDP and 3,200 jobs over and above our previous forecast."
TD Economics forecasts that the province's unemployment rate will fall to 8.5 per cent in 2013 — the lowest since 2006.
Gulati notes that negotiations are still underway, so the long-term benefits of the contract, which will be spread over 30 years, can't be known.
"Regardless, this new project appears likely to create many thousands of new high-paying jobs over the next 20 or 30 years," she wrote.
While the contract has been a morale-booster this year, it won't make much of a difference two 2011 GDP. But "the recent boost in consumer and business morale will seep into 2012" and result in a 1.6 per cent increase to GDP next year — a 0.2 per cent increase from TD's previous forecast for the province — and a job gain of 6,300 — up 900 from the bank's September estimate, Gulati says. The bank has also made upward revisions to its forecasts for retail sales and housing starts.
Job gains in 2012 will be concentrated in the shipbuilding industry itself, Gulati says, as managers and engineers are brought on board, but the ripples from the contract will start to spread outward to the rest of the province and beyond in 2013. According to Statistics Canada, nearly 40 per cent of the province's research and development, engineering and technical consulting service firms are located outside Halifax, while nearly 70 per cent of manufacturers are outside the capital region, she notes.
"Armed with the shipbuilding contract, the provincial economic outlook beyond 2013 looks more promising — the multi-year nature of this large-scale project should yield a reliable and stable income-generating source for many Nova Scotians," Gulati says, but notes that a contract awarded in the 1980s to Atlantic Canada to build naval frigates created opportunities across the country.
Read more: www.canada.com/business/Impact+shipbuilding+contract+felt+across/5670089/story.html#ixzz1d8lBFjuY
By Kim Covert, Postmedia News
November 7, 2011
Read more: www.canada.com/business/Impact+shipbuilding+contract+felt+across/5670089/story.html#ixzz1d8lY1DeE
It will take a little more than a year for Nova Scotia to start feeling the real benefits of a $25-billion contract to build naval vessels, but once they kick in the impact will be even greater than earlier estimates suggested, according to a report released Monday by TD Economics.
Nova Scotians were jubilant on Oct. 19 when the federal government announced Halifax's Irving Shipybuilding Inc. had won the contract, while Seaspan Marine of British Columbia had been awarded an $8 billion contract for coast guard vessels.
"It means young people can have a career staying here in Nova Scotia," Premier Darrell Dexter said when the contract was awarded. The province has estimated the project will create 11,500 jobs and almost $900 million real GDP during the peak production years of 2018-2020.
TD Economics has revised its own estimates of the project's short-term job-creation prospects upward.
"The most significant revision to our Nova Scotia forecast is recorded in 2013, when we assume the shipbuilding process gets underway and federal funds begin to flow," writes economist Sonya Gulati. "Relative to our September call, we have ratcheted up real GDP and employment growth by 0.5 and 0.7 percentage points, respectively. Put another way, this boost translates into an additional $228 million in real GDP and 3,200 jobs over and above our previous forecast."
TD Economics forecasts that the province's unemployment rate will fall to 8.5 per cent in 2013 — the lowest since 2006.
Gulati notes that negotiations are still underway, so the long-term benefits of the contract, which will be spread over 30 years, can't be known.
"Regardless, this new project appears likely to create many thousands of new high-paying jobs over the next 20 or 30 years," she wrote.
While the contract has been a morale-booster this year, it won't make much of a difference two 2011 GDP. But "the recent boost in consumer and business morale will seep into 2012" and result in a 1.6 per cent increase to GDP next year — a 0.2 per cent increase from TD's previous forecast for the province — and a job gain of 6,300 — up 900 from the bank's September estimate, Gulati says. The bank has also made upward revisions to its forecasts for retail sales and housing starts.
Job gains in 2012 will be concentrated in the shipbuilding industry itself, Gulati says, as managers and engineers are brought on board, but the ripples from the contract will start to spread outward to the rest of the province and beyond in 2013. According to Statistics Canada, nearly 40 per cent of the province's research and development, engineering and technical consulting service firms are located outside Halifax, while nearly 70 per cent of manufacturers are outside the capital region, she notes.
"Armed with the shipbuilding contract, the provincial economic outlook beyond 2013 looks more promising — the multi-year nature of this large-scale project should yield a reliable and stable income-generating source for many Nova Scotians," Gulati says, but notes that a contract awarded in the 1980s to Atlantic Canada to build naval frigates created opportunities across the country.
Read more: www.canada.com/business/Impact+shipbuilding+contract+felt+across/5670089/story.html#ixzz1d8lBFjuY