St. John’s economy grew in 2025, outlook steady for 2026: report

The City of St. John’s says the region’s economy showed solid growth in 2025, driven largely by offshore oil production and gains in employment.

The city released its 2025 Economic Review, an annual snapshot of key indicators for the St. John’s census metropolitan area, highlighting a five per cent increase in economic output over the year.

Mayor Danny Breen said the results point to a strengthening local economy.

“We are encouraged to see inflation easing and consumer spending remaining solid,” Breen said in a statement, adding that the city continues to build on a stable foundation despite ongoing global uncertainty.

The report shows that, outside of oil and gas extraction, real GDP rose by 1.1 per cent, led by service-producing industries. Employment increased by 3.1 per cent, adding about 3,800 jobs, though the unemployment rate edged up to 7.2 per cent as more people entered the labour force.

Population growth slowed compared with recent years, rising 1.3 per cent to 243,478 in 2025. The city attributed the slowdown to lower immigration levels and natural population decline.

Household income increased by 1.8 per cent, while retail sales climbed 4.3 per cent to more than $6.2 billion, supported by steady wages, population growth and easing inflation.

The housing sector also remained strong, with 1,037 housing starts recorded in 2025 — a 19.1 per cent increase over the previous year — reflecting continued demand and low inventory.

Inflation slowed to 1.3 per cent, down from 2.2 per cent in 2024, largely due to a drop in gasoline prices. However, the report noted that shelter and food costs remain elevated.

Looking ahead, the city expects economic growth to continue in 2026, though at a more moderate pace. Increased oil production, including activity related to the West White Rose project, is expected to support the economy, while uncertainty in global trade remains a potential risk.