2007E

Slide1 : A Socio-Economic Environmental Scan of New Brunswick Presentation prepared by LMAB March, 2007


Slide2 : Sections Covered by this Presentation 1. A Brief Presentation on the Labour Market Analysis Branch – Who we are and what we do 2. New Brunswick Demographics – Recent Changes and Future Challenges 3. The Labour Market 4. Trends and Challenges


Slide3 : Section 1 The Labour Market Analysis Branch Who we are and what we do


Slide4 : Our Main Roles 1. Research / provision of information Develop, analyze and disseminate labour market information products and services. This may include; Conducting surveys and studies Developing occupational and employment projections Maintaining databases of information Educating others on the use of statistics, interpreting other information resources and data sources available within the Department. Providing guidance on best practices surrounding research and evaluation techniques (questionnaire design, RFP’s, etc.) 2. Evaluation Conduct program evaluations and follow–up studies, develop recommendations for improvement to programs and services. Labour Market Analysis Branch (LMAB)


Slide5 : Areas of Expertise •Program reviews and evaluations •Labour market analyses •Labour market profiling and surveying initiatives •Research methodology and survey instrument design •Statistical analysis •Accessing and interpreting a variety of data sources •Economic analysis and forecasting •Occupational and industrial analyses and projections •Industry-based consultation •Project management •Labour market-related presentations /career fair participation Labour Market Analysis Branch (LMAB)


Slide6 : Some of Our Products & Services •LMA’s for and Evaluations of NBCC Programs •Graduate Follow-Up Surveys (NBCC and High School) •Program Evaluations (Employment Programs and others) •Occupational Projections, Economic and Industrial Forecasting (COPS Partnership, Conference Board, Statistics Canada, APEC, Finance) •Employer Surveys, Wage Surveys and other Labour Market Surveys •NB Job Futures, Occupational Snapshot Spreadsheet •Monthly Labour Market Information Newsletter •Regional Labour Market Profiles •Special Projects and Ad Hoc Research Labour Market Analysis Branch (LMAB)


Slide7 : Section 2 NB Demographics Components of Population Change (Historical) Current Population Growth Population Projections Net Out-Migration Immigration


Slide8 : Source: LMAB, Statistics Canada Annual Demographic Statistics Components of Population Change (Historical) Since the 70’s, births in NB have been declining, while deaths have been climbing, but the one thing that has impacted population change the most has been interprovincial migration flows


Slide9 : Current Population Growth Between 1999 & 2006, NB’s population decreased by 0.2% (1,443 people) - the rest of the country increased by 7.3% (over 2.2 million) 749,168 July 1st 2006 Source: LMAB, Statistics Canada Annual Demographic Statistics


Slide10 : Source: LMAB, Statistics Canada Population Projections 2005-2031 (Six Scenario Average) Population Projections According to the latest population projections done in 2005 – the population was expected to grow around 0.2% a year until 2025, however evidence from the previous slide suggests this may no longer be the case


Slide11 : The Growing Gap Source: LMAB, Statistics Canada Annual Demographic Statistics Population Needed Still more needs to be done to improve future population growth


Slide12 : Source: LMAB, Statistics Canada Annual Demographic Statistics Net-Migration Since 1999, more people have migrated away from NB than into the Province, a trend that has accelerated in the last couple of years


Slide13 : Regional Population Change by County (1999 to 2005) The Tale of Three Cities – Moncton, Fredericton, and Saint John Source: LMAB, Statistics Canada Annual Demographic Statistics Albert, +3.8% Westmorland, +7.8% Kent, -2.9% Northumberland, -4.0% Gloucester, -6.7% Restigouche, -8.6% Madawaska, -4.1% Victoria, -3.9% Carleton, +0.7% York, +4.6% Charlotte, +0.0% Saint John, -2.2% Sunbury, +3.4% Kings, +3.0% Queens, -2.3%


Slide14 : Regional Migration There has been growing regional disparity in-terms of population change in the Province Source: LMAB, Statistics Canada Annual Demographic Statistics


Slide15 : Immigration One in five Canadians is an immigrant, compared to only one in 33 New Brunswickers Source: CLBC Presentation: National and Provincial Trends & Issues on Immigration in NB & Canada Immigrants as a Percentage of the Population, Canada and NB


Slide16 : Immigration Historical levels of immigration compared against the Charter for Change commitment (to attract at least 5,000 immigrants per year by 2015). Source: LMAB, Statistics Canada Annual Demographic Statistics Gap to Fill


Slide17 : Source: CLBC Presentation: National and Provincial Trends & Issues on Immigration in NB & Canada Immigration How Does New Brunswick Compare with other Provinces?


Slide18 : Immigration Do Immigrants to New Brunswick, Stay in New Brunswick? Where do they settle? Source: CLBC Presentation: National and Provincial Trends & Issues on Immigration in NB & Canada


Slide19 : Immigration “Retention Rates” – Recent Immigrants by Province. How do we Rank? Source: CLBC Presentation: National and Provincial Trends & Issues on Immigration in NB & Canada Recent immigrants living in a given Province in 2001 as a percentage of immigrants who intended to live in that province when they landed


Slide20 : Section 3 The Labour Market The Size of the Labour Force & Employment Levels Unemployment & the Unemployment Rate The Participation Rate & Employment Rate Employment Gains and Losses Historical Labour Market Trends Average Weekly Earnings Educational Attainment


Slide21 : Source: LMAB, Statistics Canada Labour Force Survey - 2006 Historical Review – Annual Averages The Size of the Working-age Population Currently, the working-age population represents 81.6% of the total population. 611.8 Feb. 2007


Slide22 : The Size of Labour Force = # of Employed + # of Unemployed Source: LMAB, Statistics Canada Labour Force Survey - 2006 Historical Review – Annual Averages The Size of the Labour Force Since 1999, The size of NB’s Labour Force (15+) has grown by 7.5% or by 27,200 people 386.5 Feb. 2007


Slide23 : Employment Since 1999, Employment in the Province has grown by 9.2% or 29,900 people 359.8 Source: LMAB, Statistics Canada Labour Force Survey - 2006 Historical Review – Annual Averages Feb. 2007


Slide24 : Unemployment Since 1999, Unemployment in the Province has dropped by 7.3% or 2,700 people 26.7 Source: LMAB, Statistics Canada Labour Force Survey - 2006 Historical Review – Annual Averages Feb. 2007


Slide25 : The Unemployment Rate (UR) Since 2004, for the first time in almost 30 years, the annual UR has remained below 10. The UR= ‘Number of unemployed people’ divided by ‘size of labour force’ multiplied by 100. 6.9% Source: LMAB, Statistics Canada Labour Force Survey - 2006 Historical Review – Annual Averages Feb. 2007


Slide26 : The Participation Rate (PR) The Participation Rate has steadily increased since 99. Increasing by 2.9 percentage points The PR = ‘The size of the Labour Force’ divided by ‘size of the working age population’ multiplied by 100. 63.2% Source: LMAB, Statistics Canada Labour Force Survey - 2006 Historical Review – Annual Averages Feb. 2007


Slide27 : The Employment Rate (ER) The ER has also shown improvement since 1999. Increasing by 3.0 percent points The ER = ‘The number employed’ divided by ‘the size of the working age population’ multiplied by 100. 58.4% Source: LMAB, Statistics Canada Labour Force Survey - 2006 Historical Review – Annual Averages Feb. 2007


Slide28 : Employment Gains and Losses Employment Gains and Losses by Sector in New Brunswick in 2006 Source: LMAB, Statistics Canada Labour Force Survey - 2006 Historical Review – Annual Averages


Slide29 : Historical Labour Market Trends Labour Markets in NB have been tightening for many years and will continue to do so Even though the number of persons employed in NB is expected to continue to increase, the size of our population and labour force is not expected to keep up with employment growth. This means our unemployment rate is expected to continue to decrease, while our participation rate and employment rate are expected to increase. Source: LMAB, Statistics Canada Labour Force Survey - 2006 Historical Review – Annual Averages


Slide30 : Source: LMAB, Statistics Canada Survey of Employment, Payroll, and Hours (SEPH) Average Weekly Wages Average weekly wages have risen steadily in New Brunswick since 1999 Average Weekly Wage for Full-time workers $698.77 December 2006


Slide31 : Educational Attainment The number of people with at least some post secondary education has been steadily rising Source: LMAB, Statistics Canada Labour Force Survey - 2006 Historical Review – Annual Averages


Slide32 : Section 4 Trends & Challenges NB Economic Outlook Key Economic Trends and Challenges Industrial Trends and Challenges What Does this mean for Employment and Training?


Slide33 : New Brunswick Economic Outlook Summary of Findings Source: LMAB, Canadian Occupational Projection System 2006 Reference Scenario


Slide34 : Source: Statistics Canada, NB Department of Finance Capital Investment Expenditures Overall, capital investment expenditures dipped in 2001, but have risen steadily since 2002 (i)= intentions current Intentions for 2007 = 5.59B Capital Investment Expenditures in NB (Public & Private)


Slide35 : Capital Investments New Brunswick Had Positive Growth In Capital Investments in 2005 Public and Private Capital Expenditures Capital investment in New Brunswick reached $5.0 billion in 2006, a 4.5% increase over the previous year. Increases came from both the private and public sectors. Private sector capital investment, which represents around 76% of the total, increased 2.8% in 2006, with higher investments in both housing and nonresidential construction. Capital spending from the public sector rose 10.4% in 2006, due to higher investment in construction. A number of noteworthy investment projects got under way in 2006. Some examples include: The construction of a $30-million residential and commercial centre got underway In Shediac Construction of a new 70-bed hospital in Waterville began Twinning of the Trans-Canada Highway between Fredericton and Saint-Léonard continued the initial phases of construction began on the $750-million LNG terminal the 1.4B refurbishment of the Point Lepreau nuclear power plant started Source: Statistics Canada, NB Department of Finance, LMAB


Slide36 : Construction Activity Activity in the Construction sector to remain strong in the Short-term Construction Residential construction investment surpassed expectations in 2006, totalling $1,356.4 million, a 3.9% rise over 2005. Contributing to the increase were the construction of new multiple units and renovation expenditures. In 2006, provincial housing starts increased 3.2% to 4,085 units. Non-residential building construction investment increased in 2006, a 14.1% increase over 2005. Gains in the industrial (+5.5%), commercial (+14.5%), and institutional and governmental building (+17.5%) components were recorded. Employment in the construction industry increased by 2,500 from the previous year to stand at 21,100 in 2006. Source: Statistics Canada, NB Department of Finance, LMAB


Slide37 : Other Notable Economic Activity Manufacturing Shipments were down slightly while employment in the sector increases Manufacturing Shipments Little Changed After increases of roughly 10% in each of the previous two years, the value of shipments from New Brunswick manufacturers edged down to $14.8 billion in 2006, a 1.1% decline over 2005. Employment in the manufacturing sector averaged 36,900 in 2006, a 2.8% increase over 2005. Paper Products Recover In 2006, manufacturing shipments of paper products increased to $2,241.9 million, up 18.6% from 2005. In 2006, employment in the paper industry increased by 500 to 4,700. Wood Products Still Face Challenges In 2006, manufacturing shipments of New Brunswick wood products totalled $1,242.1 million, down 14.3% from 2005. Production of sawn lumber declined for a second consecutive year, falling 1.9% to 3.7 million cubic metres. Employment in the wood product industry decreased 1,000 to 7,300 in 2006, and employment in the forestry and logging and related services industry declined 700 to 4,500. Source: Statistics Canada, NB Department of Finance


Slide38 : Exports Decline in Value In 2006, the value of foreign exports of goods originating from New Brunswick totalled $10.4 billion, a 2.8% decline over 2005. The decline was chiefly a reflection of lower refined petroleum prices in the latter part of the year. The bulk of the overall decline can be attributed to losses in energy products, which fell 6.0%. Lower exports of agricultural and fishing products also contributed to the decrease. Energy products (56.0%), forestry products (17.2%) and agricultural and fishing products (11.7%) represent nearly 85% of the province’s foreign exports. Around 90% of the province’s foreign exports are destined to the US markets. Brazil, the UK and India follow, each with 0.6%.. Other Notable Economic Activity Exports Decline in Value Source: Statistics Canada, NB Department of Finance


Slide39 : Mineral, oil and natural gas exploration spending up in N.B. In 2006, the exploration industry is expected to invest about $16 million searching for metallic minerals and a further $45 million in its quest for natural gas for a total of $61 million, a $22 million increase over last year. New Brunswick is a major Canadian producer of lead, zinc, silver, potash, peat, antimony, bismuth and cadmium. In 2006, the overall value of mineral production was estimated to total $1,485.2 million, a 63.8% jump over 2005. Employment in the mining and oil and gas extraction industry stood at 3,800 in 2006, unchanged from a year earlier. Blue Note Mining Inc. finalized the purchase of the Caribou and Restigouche properties (located near Bathurst) and secured regulatory approval on August 1, 2006. The company plans to begin production of lead and zinc in May-June 2007, with copper production to follow later in the year. Corridor Resources Inc. continued to develop the McCully gas field and began construction of a pipeline and associated facilities. Contact Exploration Inc. and PetroWorth Resources Inc. explored for oil and gas. Contact applied for regulatory approval to test for oil production at Stoney Creek. Other Notable Economic Activity Mining Production Soars Source: Statistics Canada, NB Department of Finance, LMAB


Slide40 : Other Notable Economic Activity Irving Oil applies for environmental permits to build a second refinery in Saint John The project would be the first major refinery built in North America in almost a quarter century and would be the largest private-sector investment in Atlantic Canada. The new refinery would cost approximately $5-7 billion to build and would supply up to 300,000 barrels per day of refined product to the U.S. northeast. Doubling Irving’s existing production capacity in Saint John. It would employ approximately 5,000 people during the construction phase and create 1,000 permanent jobs upon completion. A project of this magnitude would result in significant additional employment and business opportunities during construction and operation. Some analyst have predicted it would generate spin-offs in the 15 to 17 Billion dollar range To put this project into perspective, this project would be equivalent to building Source: LMAB, NB Departments of Transportation and Energy


Slide41 : Canadian Occupational Projection System Forecast Industrial Employment Demand between 1996-2015 (average compound growth - per cent change) Source: LMAB, Canadian Occupational Projection System, 2006 reference scenario (June 2006)


Slide42 : Occupations with the best Employment Potential (either new jobs and/or attrition) 1. Management Occupations because of an aging population we are anticipating large turnover in these occupations when existing managers begin to retire in larger numbers. This will create the environment for strong employment potential in many management related occupations. 2. Health Occupations because the population is aging, governments have been investing heavily in health related infrastructure, and because the supply of workers in these fields are heavily regulated. The employment potential for occupations related to health services is very strong. 3. ICT and Engineering related Occupations Strong new job growth in both IT sector related firms and strong new job growth in firms providing engineering services will create an environment for strong employment potential in most of the occupations that are link to these fields. Source: LMAB, Canadian Occupational Projection System, 2006 reference scenario (June 2006)


Slide43 : 4. Trades Occupations Occupations linked to metal working, metal forming, metal shaping, machining, machine operating and metal-related manufacturing will post strong employment potential. Also, some occupations related to heavy construction (heavy equipment operators, crane operators, material handlers, etc) will also fair-well. Occupations linked to residential construction, manufacturing linked to exporting to the States (lumber, pulp and paper, and other building materials) are not expected to have a positive employment outlook over the medium term (next five years). 5. Sales and Service Occupations Occupations linked to the retail sector, the call center / customer service sectors will have strong employment potential over the medium term. 6. Occupation in Social Science, Education, Government Service and Religion because the existing workforce in the occupations related to educational services, social work, economic development, counselling services and other spiritual guidance are aging rapidly. It is expected these occupation will have good employment potential in the near future. Source: LMAB, Canadian Occupational Projection System, 2006 reference scenario (June 2006) Occupations with the best Employment Potential (either new jobs and/or attrition)


Slide44 : Source: LMAB Analysis of SME research SME’s The following is a list of factors impacting the survival of SME’s in the Province Some initial findings 2 of 5 new firms do not survive beyond their second year of operation, half fail before the third year. businesses owners tend to work more hours than paid employees. On average businesses owners work 56 hours per week – 15 more hours than paid employees Generally, self-employed people earn less than paid employees. As of 2004, a paid employee earned, on average, $43,000, while a self employed person earned, on average, close to $38,000. Conclusions Many new firms or start-ups that exit the marketplace are not necessarily failures, many people that start new businesses determine the opportunity cost of running new firms is too high (usually within the first two years), this normally means the monetary value received from running the firm is far less than working for somebody else or doing some other activity.


Slide45 : Source: LMAB and Bank of Canada – Daily noon rates: 10-year lookup Other Factors Impacting NB - The Canadian Dollar Since 2002 the value of the Loonie has rapidly appreciated against the value of the US dollar 0.8553 USD Mar. 12th 2007


Slide46 : Source: LMAB and US Energy Information Administration Other Factors Impacting NB - Price of Oil Since 1999 the cost of crude oil has more than doubled - skyrocketing energy costs $61.21 Mar. 7th 2007


Slide47 : Alberta’s Labour Force Development Strategy Between 2005-2015 Alberta’s economy will create 400,000 jobs. 316,000 of those will be filled through in-migration, immigration and own workforce. Will be looking to NB and other provinces to attract skilled workers to fill the 86,000 shortfall. 10 year strategy “Building and Educating Tomorrow’s Workforce” – 4 themes: Inform, Attract, Develop and Retain. 17 priority actions under the 4 themes. Unemployment rate of 3% Reduced minimum working age to 12 Tapped into priority groups as a source of labour Other Factors Impacting NB - Alberta External Demand for Labour Source: Building and Educating Tomorrow’s Workforce


Slide48 : Source: LMAB Analysis Recap of Key Challenges facing NB The following list is a recap of key social and economic challenges facing NB Demographic Challenges Out-Migration Low Levels of Population Growth Population Aging Low Immigration Levels Other Challenges Growing Regional Disparity The Growing Number of Economic Shocks Low Literacy Levels


Slide49 : This concludes the Presentation Thank You If you have any questions and/or comments please contact: Kelly Rodgers-Sturgeon – Director of LMAB, or David W. Godfrey - Labour Economist Labour Market Analysis Branch Department of Post-Secondary Education and Training Phone: (506) 457 - 4859 Fax: (506) 453-3780 Email: lmab@gnb.ca