Despite the adverse effects of slowing growth in the United States, the Nova Scotia economy appears to be heading into 2009 in relatively good shape.

The province’s rate of job creation is the best indicator of its overall economic health. Over the past three months, job growth has averaged over 2% year over year, compared to 1.5% for the country as whole.

Significant job gains have occurred in professional and business services, technical services, public administration, wholesale and retail trade, educational services, forestry, utilities and financial services.

Construction employment in the province has also been given a strong boost by the Deep Panuke offshore gas project.

Although this solid growth of employment has contributed to a healthy 5.6% year-to-date increase in retail sales, it has not been sufficient to offset the cooling of housing demand that appears to be affecting most regions of the country. Year-to-date housing starts in Nova Scotia were off by 2% in August, compared to a 1% year-to-date increase for the country as a whole.

Looking forward, the weakness in the U.S. economy will continue to put a damper on Nova Scotia’s economy in general and its forestry sector in particular.

However, over the longer term, the province’s economy should be supported by a number of recently announced major projects. These include construction of the Melford Container Terminal in Port Hawksbury, a $300 million project that is expected to add 500 jobs during construction and employ 200 once it is operational.

The Halifax Shipyards Ltd. has also recently won contracts to refit seven of Canada’s 12 navy frigates. This project will extend into 2020 and cost an estimated $549 million.

Finally, in Halifax, the combination of a low commercial vacancy rate, sustained growth of office-based employment and rising rents should cause commercial construction to strengthen over the next four quarters.

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