Deeper dive into the NB employment figures: Warning – it’s a bit ugly

As I have said in the past, I am not a huge fan of looking at the month-over-month labour force survey data because there can be significant swings on a monthly basis – even in the seasonally adjusted data.  I prefer the annualized data – and that stuff is now out for review.

I took a look at the employment figures by sector and we are seeing a worrying trend.  New Brunswick  shed employment from 2007 to 2010.  Three full years with no growth in total employment is not a good omen but when you dig deeper there are worrying signs.  First, the call centre employment reduction that started in the mid 2000s continues.  While these jobs are not categorized in a single sector of the economy, there is a cluster of them in “Business, building and other support services” which has been on a steady decline.  With reductions at UPS, Purolator and others I expect this employment to decline even further – not fall off a cliff – but continue to slowly decline.  More worryingly construction employment is up over 5,000 jobs in just three years – I assume this is in large part on the back of the stimulus – which is winding down as is the potash expansion.  The nuclear plant refurb is also slated to wind down over the next year.     Forestry has likely bottomed out but overall manufacturing is not likely to rebound much in the coming few years.

Finally, public administration and health care added almost 7,000 jobs over the past three years.  That, I also assume, will stop in the next few years.  It is unlikely to outright decline but the growth will be dramatically reduced.

The compounding problem is that as government ratchets down public spending there are fewer cars and TVs sold.  There are fewer houses bought.  The point is all the service sectors that rely heavily on in market consumer spending will be pressured – not as much as you might think – public service workers that are early retired move on to a 60% or so pension that is still expended in the local economy.

In the end, the government is likely to see continued tepid job numbers for a while and it needs to be focused on a new economic development agenda.  Infusing the economy with private investment and job creation will offset much of the losses in the public sector.

Easier said than done.

Employment in New Brunswick (2010) – and 3 yr comparison

2010
000s 07 to 10
Total, all industries 356.1 -0.3%
Goods-producing sector 79.8 -1.8%
Agriculture 5.8 -6.5%
Forestry, fishing, mining, quarrying, oil and gas 10.5 -2.8%
Forestry and logging with support activities 3.8 -9.5%
Fishing, hunting and trapping 1.8 -10.0%
Mining, quarrying, and oil and gas extraction 4.9 8.9%
Utilities 4.3 2.4%
Construction 28.4 22.4%
Manufacturing 30.8 -16.5%
Durables 13.6 -15.5%
Non-durables 17.2 -17.3%
Services-producing sector 276.3 0.2%
Trade 56 -1.9%
Wholesale trade 10.9 -6.0%
Retail trade 45.1 -0.7%
Transportation and warehousing 18.9 0.5%
Finance, insurance, real estate and leasing 15.8 -0.6%
Finance and insurance 11.6 1.8%
Real estate and leasing 4.2 -6.7%
Professional, scientific and technical services 15.6 2.0%
Business, building and other support services 17.4 -11.7%
Educational services 26.4 -0.8%
Health care and social assistance 50.1 5.7%
Information, culture and recreation 12.7 -3.8%
Accommodation and food services 20.8 -12.2%
Other services 17.2 1.8%
Public administration 25.4 20.4%

Source: Statistics Canada Labour Force Survey

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3 Responses to Deeper dive into the NB employment figures: Warning – it’s a bit ugly

  1. An earlier riser already sent me a humorous note “Is there no hope, then?”.

    Look folks, I have said before that it is difficult to imagine a scenario where NB falls off a cliff. Further, previous trends are not the best predictor of future trends.

    I think back to the Future NB summit where Francis McGuire made that speech about dramatically increasing our investment (our as in the people) in dynamic, high potential SMEs in the province. A couple of hundred million more into these firms could make a dramatic difference.

    Or the new Invest NB could get some traction and bring in a few hundred million in new investment and thousands of jobs. That, too, would be an exogenous event that would significantly bend the curve.

    Or the shale gas industry could really take off – and that would be a major economic boost.

    My point is that we need some poking and prodding to make this stuff happen.

    This isn’t doom and gloom, folks. I’m beyond that. It is what it is. As Gordon Gekko tells Bud Fox in Wall Street – “This is your wake up call, pal. Go to work.”

  2. Tim says:

    We all seem to be sifting through the rubble and coming up without own broken-something-or-other and saying to everyone “look at this”, and everyone (then thoroughly entertained at the devastation you have pointed out) says, yeah… but look what I found (as they hold up something even more horrific). ad infinitum

    I have succumbed to this as well; but despite this negative depiction – it is a good thing. We can learn from history. Those who sift through the rubble care enough to do so, and have the best intentions. Looking, thinking, and analyzing are not bad things… and just occasionally, this same mob finds a ray of light, the mod rallies, and good things happen.

    Dammit, they do not call this the dismal science for nothing, lol.
    (Sigh, it would be nice to be so inclined to look away, and live in some sort of happy la la land though.)

  3. mikel says:

    Well, I really so no reason for THAT level of pessimism. Heck, its not like New Brunswick is Egypt or Tunisia…or even Ireland. New Brunswick is a small province, and people need to remember that economics its NOT about a ‘province’. When David talks about bettering New Brunswick’s economy I doubt very much he’s talking about simply making the numbers better. I get the point about RIM, there needs to be good quality jobs in a growing industry. In other words, the central point is that people’s lives need to be better and more secure.

    To that end we aren’t talking about the IMF moving in, we aren’t talking about a ‘country’, which can’t be backed up by a national government. We aren’t talking about a place where at the very least there isn’t the prospect of labour mobility-yes, its ‘too bad’ that so many people have to leave to find work, but its not like its genocide or the crime of the century. Like David says, its time to ‘get to work’, but thats not the same as it being ‘time to get up off the mat’.

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