You probably know by now that New Brunswick’s employment performance has not been very good since the recovery started across Canada. Over the last year, New Brunswick was the only province in Canada to register a decline in total employment (June to June).
We have been told by the media since the start of the recession that New Brunswick fared much better during the recession than the rest of Canada due to its ‘diversified’ economy and strong ‘fundamentals’ and that New Brunswick was first out of the gate with an aggressive stimulus program.
It’s one of those live by the sword, die by the sword moments.
I said it then and I’ll say it now. We didn’t have the booming growth in employment that places like Ontario and Alberta had for the past 15 years so we didn’t have as far to fall during the recession. Government spending actually picked up during the downturn and the main sectors that were hurt – auto, other manufacturing, oil & gas, etc. have very little presence here to begin with. You can’t lose what you don’t have.
Now as the national economy picks up steam again there is no ‘natural’ growth pattern for New Brunswick (little to regain) and we are back to the structural issues.
I expect fairly tepid employment growth moving forward – maybe more declines – if we don’t see any new sector opportunities emerging. NB-focused services sectors (including most construction) are reactive. As there is new growth in the economy, these sectors react and hire more staff. 10 new call centres or five new manufacturing facilities lead to the requirement for 50 new retail clerks, 5 new hairdressers, 4 new plumbers (#s not accurate – just for illustration). It doesn’t work the other way around. If we see a rash of new hairdressers, it won’t lead to a new manufacturing plant setting up in the province.
So we does this new, primary growth in the economy come from? It won’t come from government spending – you can expect government spending in New Brunswick to remain fairly consistent for the next at least five and probably closer to 10 years.
Will it be manufacturing? Certain segments of the manufacturing industry are starting to pick up but the competition is enormous.
Will it be call centres? There are still some niche opportunities here but I don’t see much overall growth on the horizon.
Will it be IT? Again, it’s a very competitive space – particularly if we are looking to attract established companies here.
Will it be energy-related? Areva is one of those projects that could gird up employment for a couple of years but that project is still several years out – if it goes ahead. As for gas exploration, we can expect a modest increase in activity but not a massive injection.
Government needs to think about this stuff. It’s easy to issue press releases each month trying to spin the labour market numbers but eventually they can catch up to you. Either you have economic growth drivers or you don’t.