Boosted by improvements in the second and third quarters of the year, employment activity in Calgary is on pace to improve by nearly four per cent in 2019. Growth has been mostly driven by gains in full-time positions and occurred throughout most industries, except construction, wholesale trade, and arts, entertainment and recreation.
While there have been year-over-year gains, employment levels did ease in the third quarter compared to the second quarter, and preliminary results from the fourth quarter point toward further slowing. This is also consistent with the rise in unemployment rates.
As of November, adjusted unemployment rates in the city sat at 6.9 per cent, a decline from last year’s levels and well below the peaks reached in 2016. However, it is still high based on historical levels. Recent layoffs in the energy sector and expected layoffs in the public sector are expected to keep unemployment levels elevated in 2020. Job growth is also expected to ease, with employment levels remaining comparable to 2019 levels.
As we move into 2020, most job losses are expected to occur in the primary and utilities sector, manufacturing, public administration and other services. These will be offset by gains primarily coming from construction, transportation and warehousing, professional services, health care, and education.
The risk to the forecast weighs heavily on the downside, as industries like health care and education might see some job cuts due to adjustments from the provincial budget.
Weakness in the higher-paid sectors of the job market, combined with the uncertainty regarding future job prospects in the city, will continue to create divergent trends in the housing market. Persistently high unemployment rates are also expected to weigh on wages, which on a per capita basis remain over seven per cent below highs recorded in 2014. These shifts in the labour market are expected to prevent any substantial improvements in the higher end of the housing market.
KEY FACTORS IN CALGARY’S JOB MARKET:
- Growth is expected in several sectors, including education and health care. However, provincial budget cutbacks may cause adjustments in these sectors, impacting job growth. In addition, any further progress delays on pipelines, rail transport or other infrastructure could weigh on employment growth in construction, transportation and professional service.
- Persistently high unemployment rates will impact income growth and housing demand.
- Employment growth is weighted to industries with traditionally lower incomes. This will continue to cause divergent trends in the housing market, with a shift to lower-priced homes.