July 23, 2020
An Update from Service Canada
Employment in Nova Scotia plunged by 10.9% in the second quarter (Q2 2020) as restrictions aimed at slowing the spread of COVID-19 shocked the labour market. This was the lowest quarterly level of employment recorded in 19 years, and was accompanied by a nearly five percentage point (pp) increase in the unemployment rate. The labour force contracted by 6% as many laid-off workers waited for temporary restrictions on their industry or occupation to be lifted without seeking other employment.
The quarterly employment level reflects a major drop in employment followed by a partial recovery. In April, the number of workers in Nova Scotia bottomed out 16% below the last pre-COVID-19 measurement in February. Employment edged up slightly in May, but many closures remained in place. On June 5, many major provincial restrictions were eased, allowing businesses such as dining rooms, salons, and health practitioners to reopen. Employment began to rebound more quickly as a result; as of June, approximately half of lost jobs had been regained.
Part-time employment suffered a disproportionately large decline. Part-time positions make up a relatively large share of total employment in some of the industries which were subject to the most stringent operating restrictions or full closures. There was little difference between the year-over-year and quarterly changes observed, as the scale of layoffs related to COVID-19 eclipsed the modest labour market improvements that happened between Q2 2019 and Q1 2020.
Private-sector employment declined by 17.4% compared to the previous quarter, accounting for more than nine out of ten job losses. Private-sector businesses comprise most of the industries which were subject to operating restrictions or were affected by a loss in revenue as consumers stayed home or practiced social distancing.
Public sector employment declined comparatively little, at -2.4%, while the number of self-employed workers dipped by 2.1%. The impact of COVID-19 on the labour market has been highly unequal by sex and age group. Youth (15 to 24 years of age) have been the most negatively impacted. The number of workers in this age group declined by more than 25% on both a quarterly and annual basis, while the unemployment rate rose from 11.7% one year ago to 25.5%.
Youth are over-represented in part-time employment and in three of the industries which have suffered the largest lay-offs: accommodation and food services; information, culture and recreation; and retail trade. Throughout 2018 and 2019, youth were the main beneficiaries of broad labour market improvements in Nova Scotia, much of which has been reversed by the recent layoffs. The employment decline among prime working-age individuals (25 to 54 years of age) was the smallest of the three main age groups, but still severe at -9.3% year-over-year. The decline for older workers was somewhat worse, at -11.9%. Among all three groups, the participation rate decreased while the unemployment rate climbed.
In all three age groups, females experienced larger proportional employment decreases than males. As with youth, this was partially due to the industries they are found working in, often involving part-time or casual positions. While females account for half of all employment, they comprise more than half of workers in the most-impacted industries and approximately two-thirds of all part-time employment. Typically, females in Nova Scotia report lower rates of unemployment than their male counterparts, however this trend is presently reversed for all age groups.
Changes in employment by industry varied widely this quarter. Losses were shaped largely by the extent to which businesses were able to meet social-distancing requirements or were affected by changes in consumer behaviour and travel restrictions.
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Regional Information
Employment in Cape Breton went down by 14.6% year-over-year, which was comparable to the change in most other economic regions in Nova Scotia. The participation rate was the lowest in the province at just 50.8%. Prior to COVID-19, this region had experienced gains in employment which provided some relief to its typically challenging labour market conditions, however whether these improvements will be recovered is uncertain. In addition to pandemic-related layoffs, 150 were laid off at the end of March when the Donkin coal mine closed permanently as a result of poor geological conditions. This region has a relatively large percentage of workers in the healthcare and social assistance industry, in which employment has held steady.
The number of workers in the North Shore region declined by 14.8% on an annual basis, while the unemployment rate went up by more than three percentage points. The forestry and manufacturing industries in this region are experiencing lasting effects from the closure of the Northern Pulp mill in January. Wholesale and retail trade, which accounts for a larger share of total employment in this region than other parts of the province, shed two-in-five position since Q2 2019, accounting for a large portion of total job losses in the region.
The largest employment loss in the province occurred in the Annapolis Valley, where employment went down by 17.3% over the past year. The Labour Force Survey indicates that job losses were spread widely across several industries. However, a bright spot for this region was an increase in the number of workers in the agriculture industry, which is a major employer in the area. Of the five economic regions in the province, the Southern region experienced the smallest drop in employment since Q2 2019 at just 2.9%. Employment in this region trended much lower than usual last year; as such, it is possible that the full extent of layoffs related to COVID-19 was overshadowed by a rebound to more normal levels in some industries. Furthermore, this region has had relatively few cases of COVID-19, which may have had less of an impact on consumer retail spending than areas where viral spread was more prevalent. Industries in the Southern region which are highly reliant on tourism, such as accommodation and food services, will be challenged for a second year in a row by the cancellation of the Yarmouth-Maine ferry.
Employment in Halifax went down by 11% year-over-year, the second-smallest decrease in the province, while the unemployment rate more than doubled to 11.7%. Despite declining, the participation rate remained high relative to the other economic regions, at 64.4%. This region has benefited from the relative stability of employment in the professional, scientific and technical services, healthcare, and public administration industries, which account for a larger than share of the labour market than in other economic regions. Conversely, recovery for Halifax’s accommodation and food services industry will be difficult without the usual number of tourists. Several businesses in this industry have announced that they will be closing permanently.
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Prepared by: Labour Market Analysis Directorate, Service Canada, Atlantic Region
For further information: please contact the LMI team
For information on the Labour Force Survey: please visit the Statistics Canada Website