In this week’s econ minute, we’re talking about the latest GDP by Industry data as well as May’s Labour Force Survey data.
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GDP by Industry
Instead of looking at GDP in total, our interest lies in which industries are driving recovery and which continue to struggle. What we find is that the “K-shaped” recovery remains starkly intact—most industries are seeing moderate growth while two remain far behind.
- Overall, economic recovery continued modestly from February to March. On an annual basis, GDP increased 1.1%, marking the 11th consecutive month-over-month increase.
- Most of this growth was driven by the public sector, followed by construction and resource industries. While most industries saw at least some growth, two—utilities, and transportation & warehousing—posted a decline.
- Amazingly, compared with pre-COVID, eight of the 13 major industry categories are already seeing more economic activity than they did in February 2020.
- However, two industries in particular continue to stand out like sore thumbs. Accommodation & food services and transportation & warehousing—which includes travel—remain 32.9% and 18.6%, respectively, below their pre-COVID level.
May Labour Force Survey
What you need to know: In Alberta, employment was basically flat, falling just -1k (+/- 0.04%). The unemployment rate dropped from 9.0% to 8.7% from April to May but labour force participation dropped with, in particular, some women leaving the labour force. Employment growth in resources and a decline in long-term unemployment are two bright spots. Hard hit industries remain the big, red, sore thumb.
Canada saw job losses again in May—employment declined ~68k (-0.4%), putting Canada around -2.8% below pre-pandemic employment, while unemployment remained fairly steady, now at 8.2%. Meanwhile, the US saw gains, as it continues to ease restrictions.
Employment was relatively flat across Canada, except for Nova Scotia, where new restrictions were imposed in May. In Alberta, both full-time and part-time employment were mostly unchanged. Overall, the share of the population working is down about 2.2% points versus pre-COVID.
In Alberta, the unemployment rate continues to fall (from 9.0% to 8.7%) but coincides with a decrease in labour force participation of women, meaning fewer women were actively looking for work as restrictions increased from April to May and schools went online.
While last month, employment changes reflected losses in hard-hit sectors, this month it’s more of a mixed bag. One bright spot for Alberta in May was the growth in agriculture & resource industries, with employment increasing by 7.4k.
Directly affected industries continue to suffer—and will continue to do so as long as restrictions are in place—while other industries, in aggregate, have fully recovered.
This also means certain groups—especially young women—remain disproportionately out of the workforce and will remain so long as restrictions are in place.
One bit of encouraging news for Alberta is we did see a decline in the percentage of the labour force who has been unemployment for a year or more—from 3.0% to 2.2%. We hope to see this downward trend continue as cases decline and restrictions are eased.