July 21st, 2019

Business Beat: Last year was a tough one for local employment

By Jon Sookocheff on July 3, 2019.

Every three months, Invest Medicine Hat publishes an economic report card. This is a backward-looking document that allows us to glean valuable insights into the state of local economy. Every quarter includes a special report. Recently, we did a deep dive into 2018’s job numbers. What we found is worth sharing.

Looking at the report, we see that 2017 was a good year for jobs in Medicine Hat; 2018, not so much. While 2017 saw an almost full rebound in employment from the 2015-2016 recession, 2018’s 10.8% drop in employment was one of the worst showings in recent memory. It was just slightly better than 2006’s drop of 11%. Thankfully, it wasn’t so bad as 2011’s drop of 15.6%

Where did the jobs go? Digging into the data, we see that large year-over-year reductions occurred in agriculture and health care, with smaller drops in manufacturing, wholesale and retail trade, professional services and public administration. Employment was strong, however, in construction, transportation and warehousing, finance, insurance, real estate and leasing, education and information, culture and recreation.

What does this tell us about the state of the local labour market and the broader economy?

Firstly, it’s important to realize that labour force declines aren’t necessarily bad news. Across North America, agricultural employment is trending downward due to increasing farm size and automation. Retail sector employment, meanwhile, is in a state of flux, due to the growth of online retail. While such changes are disruptive, these are long-term trends that show no sign of slowing, and must be taken in stride.

Secondly, 2018’s employment opportunities were to be found in Medicine Hat’s building boom of 2017-2018 as well as the service sector. Again, this mirrors broader trends taking place across North America, which continues to see job growth in service-oriented segments of the economy, such as finance, insurance, real estate, education, information, culture and recreation.

Moving on from the employment numbers, our special report shows that in 2018 Medicine Hat’s local labour market saw a five-point decline in the participation rate, which is a measurement of the ratio of those working and seeking work to the population of working age. What this suggests is that there are a number of discouraged workers in the local labour force (a discouraged worker is a person of employment age who is not actively seeking employment or who has not found employment after long-term unemployment).

Why did people give up on the search for work?

Perhaps there is a systemic skills mismatch within the local economy, meaning that employers can’t find the employees with the right skillset. Or maybe there is a lack of new jobs to replace those lost during the 2015-2016 recession, meaning that employees simply can’t find work. Whatever the case may be, we’re sure to get more information from the Invest Southeast Alberta business retention and expansion and labour market project that is underway.

If you’re a business owner, watch for volunteers to come to your business starting in the fall, and be sure to complete the survey when it crosses your desk. This important piece of work will help us to better understand the dynamics at play as Medicine Hat continues to transition to a high-performing economy. Ultimately, the Invest Southeast Alberta project will help to foster a competitive business environment that serves the needs of existing business and industry while developing and implementing a plan to attract and retain labour for future growth.

In the meantime, we can rest assured knowing that good news is on the horizon and jobs are coming to Medicine Hat. Thanks to Aurora Cannabis, Folium Biosciences and various other projects, we anticipate that nearly 1,000 new jobs will be created in the region over the next couple of years. These are full time, permanent jobs, and are bound to have a measurable impact on the local economy. Fast forward to 2020 and it’s safe to say that those of us who want a job will most certainly be able to get a job, right here at home.

Jon Sookocheff is interim CEO of Invest Medicine Hat. He can be reached at http://www.InvestMedicineHat.ca.

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