A detailed analysis of Newfoundland and Labrador's productivity performance, 1997-2010

Since the mining and oil and gas extraction sector accounts for an important part of the province’s capital stock, the decline in capital intensity in this sector dragged down the capital intensity of the whole business sector. [...] The rapid growth of the mining and oil and gas sector in Newfoundland and Labrador also increased the relative size of the province’s business sector, from 62.3 per cent of the total economy nominal GDP in 1997 to 76.1 per cent in 2010. [...] An important element to consider is the substantial decline in the labour compensation share of nominal business sector GDP due to the increase in capital compensation associated with the mining and oil and gas extraction sector in Newfoundland and Labrador. [...] Due to the large increases in output, nominal gross investment as a share of GDP fell from 35.0 per cent in 1997 to 16.8 per cent in 2010, reflecting the substantial level of investment that took place in the 1990s in the mining and oil and gas extraction sector. [...] Finally, as hinted by the decline in the share of labour compensation in GDP, capital compensation as a share of business sector nominal GDP increased considerably, from 41.1 per cent in 1997 to 65.9 per cent in 2010 due to rise of the capital-intensive oil sector in Newfoundland and Labrador`s economy.