December 18, 2006

Economy

West still outpacing the East

Unemployment figures equalizing across country

OTTAWA

The East–West divide in economic activity in the country is now most evident in non-residential building, according to Statistics Canada.

All the Western provinces posted gains in October in this sector, and year-over-year increases were just over 25 per cent in Alberta and Saskatchewan. Commercial construction led the growth, especially in Alberta where the office vacancy rate was near zero.

For total building permits, an all-time high was recorded in the Prairies.

For Alberta, the billion-dollar mark was surpassed for the fourth month in a row. The province was second only to Ontario for the value of the permits issued.

John Clinkard, consulting economist with CanaData, was excited by the results.

“All that increase in capital spending has occurred in Alberta, Saskatchewan and British Columbia. Year-to-date increases are up over 20 per cent in each province.

“You put that up against the rest of the country, there is essentially no change.”

Rapid growth in the West is helping to equalize unemployment rates across the country.

The chronic double-digit unemployment rates in the Atlantic region are fading. The unemployment rate in this region was at a record low of 9.3 per cent in November.

“This is basically sucking the unemployment out of an area where it has been chronically high, and that is definitely a good thing,” adds Clinkard.

The unemployment rate has fallen over a full point since the start of the year in New Brunswick, Nova Scotia and Newfoundland and Labrador, to match or exceed the drop in Alberta’s unemployment rate.

However, the decrease in the Atlantic provinces was driven more by a shrinking supply of people in the labour force while Alberta’s was the result of rapid job growth.

At 7.4 per cent, Nova Scotia’s unemployment rate was the lowest on record since 1976.

Like New Brunswick’s 8.5 per cent rate, this ends the double-digit rates that persisted throughout the 1980s and 1990s and appeared as recently as October 2005 in New Brunswick and August 2003 in Nova Scotia.

Even Newfoundland and Labrador’s rate (13.7 per cent) was under 14 per cent for the first time since early 1982: it was 16.5 per cent at the start of the year, and often exceeded 20 per cent in the 1990s.

But the price of these reductions was an exodus of people, especially the young, aggravating the aging of their population.

“We are seeing job fairs being held to encourage people to move or at least take a job in the West and that has certainly been positive for the country,” said Clinkard.

“This has helped moderate the increase of wages in the West. Obviously, when you increase the supply of something, the price does not rise as quickly.”

DCN NEWS SERVICES

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