Despite the economic headwind caused by the significant slowdown in U.S. growth, employment in the St. Catharines-Niagara metropolitan area was up by 5.9% year over year in February 2008.

St. Catharines-Niagara's healthy increase was second only to the city of Edmonton, where employment rose by 6.0% year over year.

Back in St. Catharines-Niagara, falling demand for the motor vehicles and parts produced in the area led to a drop of 1,300 jobs in manufacturing. However, the leisure and accommodation services industry added 3,200 jobs, due in part to Heart of Niagara's expansion and upgrade of its area hotels.

Six other sectors have added jobs over the past year: construction (+2,600); business, building and other support services (+2,300); health services (+2,300); education services (+2,100); wholesale and retail trade (+1,300); and finance, insurance and real estate (+800).

This recent strong pattern of employment growth appears to have contributed to a pickup in housing demand. In February, sales of existing homes in the St. Catharines-Niagara metro area were up by 2.9%, compared to a 9.6% drop for the country as a whole. In addition, housing starts in the first two months of the year were up by a healthy 60% year over year, their strongest year-over-year increase in more than 10 years.

Looking forward, major projects such as the Niagara Convention Centre and the St. Catharine's Hospital Cancer Care Center will continue to support construction employment.

However, according to Manpower Canada, while hiring plans in St. Catharines-Niagara are still relatively strong, they have weakened on a year-over-basis. This prospect for slower employment growth and the deterioration in the outlook for the United States will probably cause a further slowdown in manufacturing. In turn, this will lead to a more serious pullback in cross-border travel and decreased demand for accommodation and leisure industry services.