Oilpatch workers left out as economy on upswing: StatsCan

The latest jobs report spins a tale of two economies in Alberta.

Statistics Canada’s labour market survey for March shows that 63,000 people — roughly the population of Medicine Hat — have been unemployed for six months or longer.

There haven’t been this many workers out of a job for so long since before the recession began. It suggests the pain of mass layoffs in the oilpatch continues to be felt by many Alberta families.

Their struggle remains, despite growing indications Alberta’s economy has turned a corner. The latest signal came from the very same jobs report, which suggested the province created a stunning 20,000 jobs last month, all of them full time.

“The Alberta economy as a whole is robust; it’s strong, certainly relative to other provinces,” economist Trevor Tombe said. “I’d still say it’s the strongest economy in Canada, except it has a pretty big chunk of workers and businesses that are in a very sharp and deep downtime right now.”

All economic indicators, including earnings, manufacturing, housing construction, oil production and employment, suggest the province’s recession ended in October, according to Tombe, an assistant professor of economics at the University of Calgary.

Similarly, Statistics Canada noted in its jobs report Friday that employment in Alberta has been on the upswing since the fall, following a pronounced decline after oil prices crashed leading to widespread layoffs in early 2015.

The province’s unemployment rate fell marginally from 8.6 per cent in February to 8.5 per cent last month as more people started looking for work.

Calgary’s jobless rate has been on a downward trend in recent months but remains the highest among major Canadian cities, having declined from a peak of 10.2 per cent in November to 9.3 per cent in March.

Edmonton, however, is heading in the opposite direction, with its unemployment rate steadily rising from 6.9 per cent in November to 8.4 per cent last month. It’s the second highest among large Canadian cities and well above the national average of 6.7 per cent.

Alberta’s jobs growth last month was fuelled by gains in finance, insurance, real estate and leasing (7,000), wholesale and retail trade (6,000) and manufacturing (5,000).

It was the largest monthly employment increase since February 2014, long before the oil price crash. But economists say they largely don’t consider the size of the gains in a single month as much as they look at the trend, which suggest things are looking positive for Alberta’s economy as a whole.

Todd Hirsch, chief economist at ATB Financial, said he was surprised by the major gains, having expected a modest rise in employment or perhaps even a decline.

Still, he said the trend is in line with other indicators, including an uptick in manufacturing. He pointed to a rise in food and beverage-making, from craft beer brewing and honey manufacturing, to food processing in southern Alberta.

But he’s waiting for a couple more positive jobs reports before declaring Alberta’s economy is back on track.

“The size of the gain in March was surprising; I wouldn’t be surprised if it pulls back a little bit in April and May,” Hirsch said.

“We’re moving in the right direction, but still not ready to say we’re on a strong growth trend just yet.”

For scores of unemployed oil and gas workers, the trend has been anything but positive. The Alberta economy shed 52,000 jobs from December 2014 to July 2016 amid an ugly downturn for the energy industry.

One of the trends that dominated the recession was the long wait for work. Those who have been jobless for six months or longer currently account for 2.25 per cent of Alberta’s labour force, the second highest share in the country next to Newfoundland and Labrador.

In Saskatchewan, the long-term unemployed represent 1.5 per cent of its workforce.

Job losses in Alberta have been highly concentrated in the resource industry and the sectors that supply it, such as manufacturing, Tombe said. Employers in the services sector, meanwhile, have been growing and were responsible for three-quarters of the March employment gains, having added an estimated 15,000 jobs.

Those who have been unemployed for months, Tombe said, are “the laid-off resource and related manufacturing workers who have trouble switching into the service sector employment where we see the gains.”