Nova Scotia's job market is booming, but it's not all good news
Nova Scotia is experiencing massive job growth and record employment levels, but it's unclear whether the trend can sustain amid rising interest rates and a possible recession.
According to Statistics Canada, the province added 24,800 jobs between January 2022 and January 2023, an increase of 5.2 per cent. Jobs have grown by 1.9 per cent or 9,400 between December 2022 and January 2023 alone.
The labour force is the largest it has ever been in Nova Scotia with 528,100 people working or actively looking for work. That's up 3.2 per cent from the same time last year.
Unemployment is also down. As of January 2023, it was at five per cent, down from 6.8 per cent at the same time last year.
Certain sectors are seeing particular job growth, including accommodation and food services, manufacturing and education.
Construction has seen a marked increase with a 12.2 per cent growth in jobs over the last year, 4.3 per cent between December 2022 and January 2023 alone.
But there is uncertainty about the trend after multiple interest rate hikes from the Bank of Canada and the potential of a recession.
Dalhousie economics professor Lars Osberg said one word summarizes the past couple of years of economic activity: uncertainty. The full impact of the pandemic on the economy remains to be seen.
"What we really don't know at this point … is just how much of the previous relationships that used to drive the economy and make it at least somewhat predictable in the period up to 2019 and into 2020 are absolutely still valid today," said Osberg.
He said increased interest rates first affect industries like construction and housing, but they don't take effect right away. While there's currently a boom in construction jobs, Osberg said there could be a decline in the next six months to a year.
Decline in those jobs can result in less consumer buying power and a deepening recession across industries, he said.
Duncan Williams, president and CEO of the Construction Association of Nova Scotia, isn't quite as worried.
He said while the industry is highly sensitive to interest rates, and some projects are being reassessed for feasibility, there's enough long-term work to sustain the job growth in construction.
An influx of new residents is driving up demand for housing and the province is going through a massive infrastructure renewal, he said.
"Those projects can no longer be put off," he said. "That includes our health care, highways, bridges, roads, schools, all the things that we take for granted," Williams said.
While jobs abound in construction, there aren't currently enough people to fill the vacancies.
Williams said there needs to be around 8,000-10,000 new workers in the next three to five years to keep up with demand, and he's doing everything he can to recruit.
While a shortage of workers is a problem for employers, it can be positive for those on the hunt for a job, according to Osberg.
"For workers, labour shortages are the best news that's out there," said Osberg. "It means that employers have to compete for them. They have to provide good working conditions and steady work and make their jobs attractive."
Employers in the service industry have learned this lesson first-hand. While jobs are steadily growing in the sector, there's still a challenge to find workers to fill those roles.
Darlene Grant Fiander, president of the Tourism Industry Association of Nova Scotia, said jobs were cut back so severely at the beginning of the pandemic that many employees moved to other industries. Now, many workplaces are providing incentives and flexibility to try to attract those workers back.
"The competition is tough, it's tough right now," she said. "People have choices, and it's probably the first time in our lifetime that workers have had the kind of choices that they have."
Grant Fiander said while jobs are growing in the sector, they're still not back up to pre-pandemic levels. Inflation and the possibility of a recession present challenges, but she said employers in the service and tourism industry are optimistic about the future.
MORE TOP STORIES