I am pretty impressed by how the labour market has held up in the wake of the Covid-19 pandemic in New Brunswick. Total employment in June was down to 366,000 (unadjusted) from 373,000 last year but on the whole relative to the rest of Canada this is a good number.
You can see from the following chart that we had started to turn a corner in the past couple of years – I believe mostly to the boost in immigration and I am hopeful that the provincial economy could get back to something that looks like normal in the near future. But I am concerned about the slew of export-focused firms that announced layoffs in the past few weeks – Irving Oil, WestJet, the hotel reservation centres, etc. These are export dollars that come into the province and boost the local economy. 1,000 export-focused jobs creates enough labour income to support hundreds of jobs in local retail, restaurants and other services but the relationship doesn’t run two-way. 1,000 jobs in restaurants or pet care doesn’t create export-based jobs. To put this another way, the loss of export-based jobs is much more harmful to the economy than the loss of jobs that are reliant on local markets.
Accommodation and food services employment is holding up as much as we could hope – down only 13.5% year-over-year. We don’t have more granularity in these figures.
Manufacturing employment, again mostly export-focused, is down but not dramatically. This is one we need to keep an eye on – particularly GDP and income figures as some sectors are getting more productive in recent years.
You know my annoyance with the mining sector…..
Finance and insurance is mostly locally-focused and is holding up nicely in the wake of the pandemic.
The business, building and other support services sector is where most of New Brunswick’s call centres, business services centres and other back office activity is classified. This is a huge export sector for New Brunswick bringing in something like $1.4 billion in export revenue each year. This is a sector we need to worry about as this work – post-Covid 19 – can be done from homes anywhere in North America and around the world. We need it to stay – and hopefully grow – here.
Public administration employment has held up and, in fact, is growing – up by more than 3,000 in June compared to June in 2017. Health care, education and public administration is up by 6,000 jobs over the same period. Remember the Saillant thesis.
I conclude from all this the labour market has held up and is coming back relatively strong but I worry about the underlying export-based sectors. If we lose more activity there in the coming months and years it will keep the brakes on the nascent economic recovery we were witnessing pre-Covid 19.