Jobs report shakes off falling energy prices

THINK OUTSIDE THE BOX:  If plummeting oil prices are expected to bring waves of layoffs in Alberta, it appears that companies in the province haven’t bought into the panic—at least not yet. In fact, last month the number of jobs in our province actually increased.

According to this morning’s Labour Force Survey, total employment increased by 3,200 (adjusted for seasonality), all of them full-time positions. Alberta’s unemployment rate remained unchanged at 4.5 per cent.

There were significant gains in construction (+9,100), health care and social assistance (+6,500), and even in oil and gas (+4,700)—the sector around which there is some worry at the moment. While the price drop for West Texas Intermediate probably overstates the price drop for Western Canadian oil, there is no question that producers in this province are seeing lower cash flow.

But while the number of jobs increased, there may still be some cracks starting to show in the energy sector. Employment in professional, scientific and technical services took a big hit—a loss of 11,000 jobs. Occupations in this category include geologists, engineers, accountants, lawyers and technicians—the kinds of services acquired by oil and gas producers. Even though they didn’t lay off any of their own workers, energy producers may be starting to pull back on contracts with external service providers.

Also, the survey of employment was conducted between November 9 and 15—and since then the price of Western Canadian Select blend oil has slumped another $10 per barrel. It’s almost certain that at least some job losses in the province are still to come.

Todd Hirsch • Chief Economist                  December 5, 2014

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