Nova Scotia: late coming into the recession; could be late leaving it too
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RSS FeedThe Recession Takes Hold in Atlantic Canada is the headline in the May 2009 Economic Update for APEC Members, published by the Atlantic Provinces Economic Council. An Ontarian could justifiably ask, “ What took you so long?” This observation is particularly applicable to Nova Scotia where employment declined in April four months after it started to contract in the rest of the country.
Key drivers of Nova Scotia’s economic growth over the past year have been professional services, which added almost 4,400 jobs, followed by transportation services, +3,900. There have also been year-over-year job gains in: education services, +2,900; accommodation and leisure services +2,900; and public administration, +2,700. Over the past year, significant job losses have occurred in: wholesale and retail trade, -5,500; managerial and support services, –3,900; manufacturing, -2,600; and forestry and construction, which each lost 1,800 jobs.
It appears that Nova Scotia’s relatively stronger pattern of job creation vis-à-vis the rest of the country has had little impact on housing demand in the province, given that housing starts are down -47% year to date. For Canada as a whole, the year-to-date decline in housing starts has
been -49%.
This being said, the recently announced amendment to the Canada-Nova Scotia Affordable Housing Program Agreement and the extension to the Canada Nova Scotia Housing Renovation Agreement should give residential construction a much needed boost in the second half of 2009 and into 2010.
Looking forward, although non-residential/engineering construction in the province will be supported by EnCana’s Deep Panuke natural gas project, which is slated to start production in 2010, the strength will be tempered by the announced downsizing of a number of call centres. There will also be ongoing weakness in forestry products and in manufacturing. As a result of the lagging employment adjustment, it is quite possible that the province will follow the rest of the country out of recession just as it followed it into the downturn.
Gross Domestic Product (GDP) Growth – Nova Scotia vs Total Canada
Data source: Statistics Canada.
Forecasts and chart: Reed Construction Data – CanaData.
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