New Brunswick residents are quite used to bad economic news. Typically, New Brunswick and the other Maritime Provinces trail the rest of the country in job creation and income growth. What to do about this situation will be the subject of future posts. This post is designed to illustrate trends in labour force and employment data over the past few years.
Small businesses, which typically provide goods and service to local populations, rely on either a growing labour force or growing incomes to fuel growth (or, at the very least, cover rising labour and supply costs). Unless they can find new markets or unmet needs, most such businesses will struggle in a stagnant economy.
It is disappointing, therefore, to see local media downplay or ignore this issue. Media have a fascination with the unemployment rate and give it prominence in labour force reports. That can be misleading, as labour mobility in this country is such that those who are unemployed or under-employed and have desired skills can readly re-locate to parts of the country where those skills are in demand. If skilled labour leaves the area, the unemployment rate may drop. Declines in that rate are reported as ‘good’ news, but the reality is that declines in the labour force mean a loss of income in the region. Less money circulating, and less opportunity for small business, are the consequences. That triggers further job losses, as local businesses close or lay off staff.
Local media would do us a favour if they concentrated on labour force and employment gains and paid less attention to the unemployment rate. To that end, I show below data from the Statistics Canada Labour Force Reports (Table 282-0054). The first chart shows changes in the labour force (those employed or seeking employment); the second shows trends in total employment. Data run from January (JA) to December (DE) for each of the three years. Scroll over the bars to see the actual numbers for that month/year. Note that in both cases, the numbers are three-month rolling averages and are unadjusted for seasonality. By comparing the column heights and numbers for a given month over the three-year period, you can determine the net job creation (or loss) year over year. Those are good indicators as to whether the local economy is growing or not.
By examining each month you can see changes in the data for the three-year period. Clearly, there has been a significant drop in employment since 2010. Local store closings should therefore not be a surprise.
Regions within the province vary in economic performance. The charts below show employment data trends for the five regions reported by Statistics Canada (Labour Force Reports Table 282-0054): Campbellton-Miramichi, Moncton-Richibucto, Saint John-St. Stephen, Fredericton-Oromocto, and Edmundston-Woodstock.
Campbellton-Miramichi showed some improvement in 2011 but growth slowed again in 2012.
The Moncton-Richibucto is the only region showing relatively consistent growth over the past few years. Persons looking to establish a new small business (or acquire an existing one) providing goods/services to the local population would, all things being equal, have a better chance of success here than in other parts of the province.
The Saint John – St. Stephen region showed signs of stagnation in 2012 after a decent 2011.
The Capital region (Fredericton-Oromocto) has been hard hit by provincial and federal spending cuts. Few work and supply orders from governments means less opportunity for local businesses. This region needs to find some other economic drivers to replace the weakening government drivers.
Growth in the Edmundston-Woodstock region has declined since 2010, but has been fairly stable for the past two years. by