SECTORAL OUTLOOK NOVA SCOTIA

Transcription

1 SECTORAL OUTLOOK NOVA SCOTIA Winter 2014

2 P a g e 2 TABLE OF CONTENTS ACRONYMS... 3 LIST OF FIGURES... 3 LIST OF TABLES... 3 ABOUT THE SECTORAL OUTLOOK... 4 EXECUTIVE SUMMARY... 5 NOTES ON METHODOLOGY... 6 SECTION 1: ECONOMIC AND LABOUR MARKET OVERVIEW... 7 SECTION 2: SECTORAL OUTLOOK CONCLUSION ANNEX REFERENCES... 29

3 P a g e 3 Acronyms COPS.Canadian Occupational Projection System EU...European Union GDP Gross Domestic Product HST.Harmonized Sales Tax LFS...Labour Force Survey, Statistics Canada NAICS North American Industrial Classification System NHS National Household Survey, Statistics Canada NL...Newfoundland and Labrador NS...Nova Scotia PEI...Prince Edward Island ROOC.Regional Occupational Outlooks in Canada US United States List of Figures Figure 1: Figure 2: Figure 3: Figure 4: Figure 5: Figure 6: Figure 7: Figure 8: Figure 9: Figure 10: Figure 11: Figure 12: Figure 13: Comparison of Employment Growth, Atlantic and Canada...9 Estimates of Interprovincial Migrants, Atlantic Distribution of Employment Growth, NS Health Care Employment, NS Professional, Scientific, & Technical Services, NS Mining, Oil & Gas Employment, NS Finance, Insurance, Real Estate Employment, NS Accommodation & Food Employment, NS Manufacturing Employment, NS Other Services Employment, NS Construction Employment, NS Trade Employment, NS Public Administration Employment, NS List of Tables Table 1: Table 2: Table 3: Labour Market Indicators, Atlantic Canada Labour Market Indicators, Nova Scotia Nova Scotia Industrial Outlook...18

4 P a g e 4 About the Sectoral Outlook Each year, Service Canada issues three-year employment forecasts both by industry and by occupation for Nova Scotia as a whole. The results of the analysis are published in the form of a report intended to provide a comprehensive overview of recent labour market developments and outlooks in Nova Scotia. We hope this series of documents will interest people who are seeking labour market guidance and those who help them, including parents, educational staff, and employment assistance services workers. It should also interest businesses and employer associations that want to identify human resources management issues in their industries. This document is composed of two sections. The first part provides a synopsis of the labour market in the region, including an overview of economic developments and key labour market indicators. The second part presents sectoral outlooks by industrial groups catalogued according to the North American Industry Classification System (NAICS). Finally, we would like to acknowledge the LMI team located in National Headquarters who provided the forecasting tool and ongoing support throughout this project and the Canadian Occupational Projection System (COPS) team who provided us with access to many of the base analysis for the forecasting tool used to carry out this study. We also wish to acknowledge the contribution of provincial colleagues in the validation of the employment estimates

5 P a g e 5 Executive Summary The Nova Scotia economy has been constrained over the most recent years and is expected to remain so over the forecast period One of the largest challenges to the province is that of a slow growth in the population, which has decelerated significantly over the last decade. This has resulted in an aging population in the province, a condition that has been exacerbated by a recent large outflow of younger migrants from the province. The labour market in the province has been challenged over the most recent years and is expected to continue to perform weakly until Employment has been fairly stagnant over the last several years and is expected to grow slowly over the forecast period. The labour force in the province has not grown significantly since 2010 which, coupled with weak employment growth, has resulted in relatively high levels of unemployment in the province. The unemployment rate in 2012 was a noticeable increase from the recent low evident in 2008 and is not expected to diminish significantly over the forecast period. Nova Scotia has emerged as a predominately service sector economy in terms of employment and is expected to continue to do so over the forecast period. Demographic change has helped push Health services to the front in terms of current and future employment growth. A shift towards technology and knowledge intensive industries will continue to increase employment in Professional, Scientific and Technical Services. A rebound in offshore oil activity and mining should lead to a modest increase in Mining and Oil and Gas in Nova Scotia. Employment growth is also expected for Finance, Insurance and Real Estate and Accommodation and Food Services as the economy slowly improves. The economy and labour market is expected to get a significant boost from the shipyard work that will be undertaken at the Irving Shipyard; however the production of the ships is not expected will to begin until late 2015 and will be largely outside this forecast. Employment is expected to contract for Construction in the province due to low levels of major project activity and weakness in residential housing. The restrained economy is also anticipated to be reflected in the deterioration of Trade employment in the province, and public budgetary restraint will be reflected in a contraction in employment in Public Administration in the province.

6 P a g e 6 Notes on Methodology The three-year employment outlook model produces medium-term industrial and occupational employment projections at the provincial and sub-provincial level. The projection model is based on an economic environmental analysis to establish a common and coherent analytic framework as the basis for developing the detailed employment forecasts. Specifically, this framework is based on the Canadian Occupational Projection System (COPS) macro-economic scenario supported by forecasts produced by the Conference Board of Canada. The labour market scenario makes it possible to better characterize labour market conditions expected to prevail during the review period. Once the macro-economic scenario is established, employment by industry forecast estimates are generated by the Canadian Occupational Projection System (COPS) partnership and supported by the Conference Board of Canada. These forecast estimates are then validated by regional economists. The validation process is a two-step approach employing an analytical validation using supplementary variables, as well as a consultative process with key partners and stakeholders. In the Atlantic region, three-year employment forecasts are produced based on the analysis described above for the three-year period, from 2013 to The results are presented at a broad aggregate level based on the two-digit North American Industry Classification System (NAICS) to ensure better reliability of the estimates. Precise definitions of the industries are available in the NAICS published by Statistics Canada. This level of aggregation is based on the Labour Force Survey industry tables (16 industries) released by Statistics Canada for the Atlantic Provinces each month. The only variation is the separation of the Mining and Oil and Gas industry from Forestry, Fishing and Hunting due to its relative importance in the region. Those industries with a positive or negative employment growth of 150 or greater over the forecast period were considered to be showing significant growth and were analyzed in more depth. The remaining sectors were deemed relatively stable or too small to discuss any changes with adequate reliability. The annual average growth rates in the tables are calculated using compound growth rates. The growth rates specifically refer to changes from and with 2013 as the base year.

7 P a g e 7 Section 1: Economic and Labour Market Overview The first section sets the context for the employment projections by providing a synopsis of the global economic situation, recent trends in the Canadian economy, and the economic and labour market situation in Atlantic Canada as well as in Nova Scotia. The Global Economic Environment The global economy slowed for the second consecutive year in 2012 as weak growth among developed countries, including the United States (US), continued to take its toll. Coming into 2013 there was general optimism that conditions would improve during the second half of the year, but the upturn is now projected to occur later in In October 2013, the International Monetary Fund (IMF) lowered its 2013 global economic expansion target to 2.9%, which translates into a third straight year of slowing world growth. The US is the world s largest economy, responsible for over 18% of global GDP in However, China could take over the top spot as early as 2016, according to the latest IMF forecast. Not surprisingly, the two economies are closely linked, and China is feeling the effect of slow growth in a number of its large export markets, including the US. In fact, China s expansion has slowed to about 7.5% per year. While this rate of growth seems enormous by western standards, it represents China's worst performance in 23 years. Keeping a steady pace of growth is a challenge for the US economy. Following two relatively slow years, the economy expanded by 2.2% in 2012, and this was the highest rate among G7 countries. US growth slowed in the first half of 2013, and the IMF now anticipates 1.6% total growth for the year. Yet there is widespread optimism that the US will drive much of the global growth in According to the October 2013 US Economic Forecast, growth will begin to accelerate in the middle of 2014 and will continue in 2015 and This positive outlook is echoed by the IMF, which forecasts 2.6% GDP growth in the US in 2014 Meanwhile, Germany, France, Italy, Spain, and other European Union (EU) member states continue to struggle to get out of the recession. With GDP having receded by 0.4% in 2012, the EU is expected to shrink an additional 0.4% in 2013 according to the IMF. The effects of the sovereign debt crisis have varied throughout the EU, and the most troubled EU member states continue to suffer through on-going austerity measures. However, business confidence indicators (inflation, interest rates, foreign investment, etc.) suggest economic activity is close to stabilizing for some EU members.

8 P a g e 8 The Canadian Environment Canada s economy outperformed those of most other developed nations in 2012, posting real GDP growth of 1.8% over the year. While the country may have done well compared to other developed countries, on its own merits, economic performance in 2012 has to be considered mediocre. Long term, Canada needs GDP growth of between 2.0% and 2.5% in order for Canadians to maintain their standard of living. As with the world economy, Canada s economic activity was widely expected to pick up during the second half of The Bank of Canada has since lowered its outlook due to reduced contributions from net exports and business investment. As of late October 2013, the Bank of Canada called for the economy to grow by 1.6% in 2013, 2.3% in 2014, and 2.6% in 2015, with commodity-rich Alberta, Saskatchewan, and NL playing lead roles in the country s economic growth. The central bank had expected exports to show an increase in the third quarter of 2013, but weakened global demand and fiscal challenges within the US market delayed this turnaround. However, stronger US economic growth and a weaker Canadian dollar are expected to propel export gains. In response to slow economic growth and low inflation, the Bank of Canada is likely to hold interest rates around 1% through This measure could potentially reignite the housing market, increase borrowing, and accelerate growth, particularly in the critical export sector. International trade makes up a large part of the Canadian economy, accounting for more than 45% of GDP. In 2012 the US, EU, and China were the top three destinations for Canadian exports, together accounting for almost 90% of the value of all exports. The US, by far Canada s largest trading partner, is typically the destination for three-quarters of the value of Canadian exported goods. In 2012 the EU received 8.5% of Canadian shipments and China about half that. Between 2008 and 2012, China displaced Japan as Canada s third largest export market. Given the increasingly uncertain prospects for Canada s largest trading partner, it seems reasonable to expect modest export growth in 2013 and Although Canadian businesses have generally welcomed the tentative Canada EU trade deal, which was agreed to in 2013, it will be at least two years before the deal is implemented and begins to impact export volumes. Through the first eight months of 2013, Canada s leading exports to: the US were: energy products, including oil & gas and electrical power; motor vehicles and parts; and wood, lumber, and pulp and paper products;

9 P a g e 9 the EU were: precious stones and metals, including gold and diamonds; aircraft and parts; and crude and petroleum oils; and China were: wood, lumber, and pulp and paper products; seed and food oils, grains, and legumes; and iron and copper ores. The Economy in Atlantic Canada Since the 1950s, population growth has been slower in Atlantic Canada compared to the rest of the country. According to Statistics Canada s National Household Survey (NHS) results, in 2011 Atlantic Canada's population was 2,327,640, representing a 2% increase from the 2006 Census. Comparatively, the population of Canada grew at a faster rate of 6% during this period. The gender composition of Atlantic Canada s population was similar to the rest of country, as males and females were fairly evenly distributed. Atlantic Canada has an older population than the rest of the country with a median age ranging from 42.8 years in PEI to 44 years in NL, compared to 40.6 years for all of Canada. In the 1970s and 1980s, Atlantic Canada s labour force and employment grew at a similar pace than the rest of Canada. There was, however, a significant divergence between national and regional trends that emerged during the recession of the 1990s. Between 1998 and 2008, employment growth outpaced labour force growth in the Atlantic. As a result, unemployment rates declined in the region, reaching an all-time low of 9.1% in 2007, narrowing the gap with Canada. During this period, several large energy Figure 1: Comparison of Employment Growth (%) Canada Atlantic s 1990s 2000s 2010s Source: Statistics Canada, Labour Force Survey projects occurred, including offshore oil & gas developments, acting as a catalyst for growth in many sectors of the Atlantic economy. Since the 2009 global recession, employment levels have declined for all major age groups in the region, except for older workers (those aged 55 years and over). The employment share of this age group has increased and has now surpassed the proportion of youth (15-24 years) employed in the Atlantic region. Older workers (55 yrs.+) currently account for 21% of total employment, the highest share on record. Youth (15-24 years) account for only 13%, the lowest employment share for this age group since The prime working-age group (25-54 years) account for 65% of total employment. The employment share of this age cohort has steadily been in decline since reaching an all-time high of 76% in 1999.

10 P a g e 10 Figure 2: Estimates of Interprovincial Migrants (July 2012 June 2013) In Out Net NL PE NS NB As shown in Figure 2, as of June 30, 2013, net interprovincial migration was negative in all provinces in the Atlantic and was at a six-year low. According to Statistics Canada annual demographic estimates, about 38,812 people left the Atlantic region for other parts of the country between July 2012 and June 2013, and only 27,926 people moved to the Atlantic region from other provinces over the same period. Source: Statistics Canada, Annual Demographic Estimates This resulted in a net outflow of 10,886 people from the Atlantic region over the past year. NS experienced the largest interprovincial net outflow (-5,658) to other parts of the country, accounting for about 52% of those who left the Atlantic region. Ontario and Alberta remain the top provinces of destination for the vast majority of Atlantic Canadians. Between 2000 and 2013, approximately 77% of people who migrated out of the Atlantic chose these two provinces as their destination of choice. Data shows that an increasing share of Atlantic Canadians, however, are choosing Manitoba and Saskatchewan as their province of destination with an increase of 26% since Youth aged are the most likely group to migrate away from the Atlantic region. In , just over 5,500 youth left the region for other areas of the country. One of the main incentives for interprovincial migration is for economic reasons as buoyant labour markets increase an individual s chances of gaining employment. Individuals with more education are, in general, more likely to leave the Atlantic region for more prosperous provinces. In Atlantic Canada, both the size of the labour force and employment levels increased from 2011 to 2012, but the labour force grew at a faster rate than employment. As a result, the unemployment rate increased slightly to 10.3%. Nationally, the unemployment rate edged down to 7.2% during the same period. The high unemployment rate in Atlantic Canada can largely be explained by higher unemployment in the rural areas. In 2012, the unemployment rate in the region s urban core was 7.8% compared to 14.6% in rural areas. The high unemployment rate in rural Atlantic Canada reflects the highly seasonal nature of the rural economies in the region, which results in large seasonal variation in employment.

11 P a g e 11 Table 1: Atlantic Canada Labour Market Indicators, (000s) Change Change Number % Number % Population 15+ ( 000) Labour Force ( 000) Employment ( 000) Full-time ( 000) Part-time ( 000) Unemployment ( 000) Unemployment Rate Participation Rate Employment Rate Source: Statistics Canada, Labour Force Survey The service sector has continued to be the largest sector of employment in Atlantic Canada, accounting for 79% of total employment. However, since the 2009 economic recession, job growth in this sector has slowed to only 0.7% compared to an average of 1.0% between 2003 and The Trade industry, which is a very significant component of the service sector in Atlantic Canada in terms of employment, has begun to recover from some of the job losses recorded in There were also notable gains in Business Services, Health Care, and Information and Cultural industries. However, the gains were not enough to completely offset job losses in other industries including significant losses in Financial Services, Education, and Other Services. Jobs in the Goods-producing sector have been on the decline overall in the Atlantic region in recent years. Employment declined by 3,600 (or 1.6%) in the Goods-producing sector in 2012 compared to the previous year. This was due to job losses in Manufacturing, Construction, and resources industries (with the exception of the Mining, Oil & Gas sector). However, industrial restructuring, especially in the rural areas, has led to the closure of several plants resulting in notable job losses recently. This trend continues to dampen employment growth in Manufacturing and other related primary industries.

12 P a g e 12 The Nova Scotia Economy The Nova Scotia economy has been constrained over the most recent years and is expected to remain so over the forecast period. Provincial real GDP grew only marginally in 2012 (0.2%) and well below 1% in 2013 (0.8%). GDP growth is expected to accelerate to close to 2% in 2014 and strengthen into Although exports have been challenged over the last years, there has been a general upswing in export activity as the US economy improves. In particular, export activity has increased in 2013 for paper products with the reopening of the NewPage mill, and significant increases were also recorded for forestry and building products, rubber and plastics, and farm and fish products (NS DOF). The recovery in exports should be supported by a general weakening of the Canadian dollar versus that of the United States over the forecast period. On a domestic front, a significant challenge to the economy will be the continued weakness in Construction in the province. In Nova Scotia, the seasonally adjusted annual rate of housing starts was 2,520 in January 2014, which was a significant decline from 7,776 in January The weakness is primarily in single unit residential construction and has been offset to a degree by multiple unit housing starts which are concentrated in the Halifax Metropolitan area. A brighter note is expected over the forecast period for investment in non-residential construction, which is anticipated to rebound as major projects begin to commence in the province. APEC anticipates an increase in major project investment of 12% in 2014, and this should remain strong into 2015 as projects such as the shipbuilding activity at the Irving yard begin production and offshore energy activity rebounds. The general improvement in the provincial economy should manifest in an improvement in retail sales in the province. Retail sales grew by roughly 1% in 2012, mostly supported by motor vehicle sales. Retail sales are expected to strengthen considerably in 2013 as interest rates remain low, inflation remains stable, and economic activity rebounds. Retail sales are expected to remain in the vicinity of 2% growth in 2014 and The drop in the exchange rate, an improving US economy, and resumption of the ferry service to the US from Yarmouth should help to improve Tourism in the province over the period. The Tourism industry in the province is significant it is valued at $2 billion and contributes $722 million to provincial gross domestic product, or about 2% of all provincial economic activity. It has a direct employment impact of over 24,000 jobs, with many concentrated in Accommodation and Food Services. The labour market in Nova Scotia has been constrained over the last three years. Growth in the working-age population has decelerated significantly over the last decade and has grown by just over 1% last year, as compared to 5% at the beginning of the decade. The slowing population

13 P a g e 13 growth is the result of a decreasing birth rate in the province and recently accelerated out migration from the area. Initial estimates for indicate a record net flow of almost 5,600 from the province, most of whom are relatively young. This has resulted in a slowly growing and rapidly aging source population in Nova Scotia. Table 2: Nova Scotia Labour Market Indicators, (000s) Change Change Number % Number % Population 15+ ( 000) Labour Force ( 000) Employment ( 000) Full-time ( 000) Part-time ( 000) Unemployment ( 000) Unemployment Rate Participation Rate Employment Rate Source: Statistics Canada, Labour Force Survey Mirroring the slowdown in the population growth, the labour force in Nova Scotia has not changed significantly in the last three years. The change in the labour force has been well under 1% over this period, a noticeable slowdown since the beginning of the decade. The labour force participation rate in the province has remained relatively flat since the middle of the last decade, hovering around 64%. This is noticeably below the national average of roughly 67% over the same period. The lower participation rate reflects a number of factors, including an older population who tend to have lower levels of labour force participation. Employment in the province has been similarly stagnant since There has been no significant growth in employment during this period, with employment in 2012 being only 1% greater than four years ago. Interestingly, the employment increase, while marginal, was entirely in part-time work. Full-time employment actually fell over the same period.

14 P a g e 14 One aspect of employment that is worth mentioning is the rise in the number of older workers in the province. Since at least the middle of this decade, most of the employment growth in the Nova Scotia labour market has been in older workers aged 55 years and over. In 2012 alone, employment increased for older workers (55yrs+) by 7,500 while employment decreased by over 4,500 for the younger age groups. With a stagnant labour market and weak employment levels, the number of unemployed in the province has not declined but has actually grown since bottoming out in the middle of the decade. This was mirrored with a steady increase in the unemployment rate over the last four years, rising from 7.7% in 2008 to 9.0% in 2012.

15 P a g e 15 Section 2: Sectoral Outlook This section provides an overview of the industrial structure in Nova Scotia, followed by a synopsis of expected changes in the industrial base over the forecast period. The latter part of Section 2 provides more detailed analysis of industries projected to grow, industries projected to decline, and industries perceived to remain relatively stable over the next three years. Industrial Structure Nova Scotia has traditionally been a producer of primary products, particularly the exportation of fish, and forestry-related products. However, the provincial economy and labour market have continued to undergo a profound transformation, as services increasingly emerge as the predominant source of employment in Nova Scotia. Supporting this new trend is a heavy reliance on employment in the public sector in the province, particularly in Halifax. For example, the proportion of Federal government employment in the province is a full percentage point higher than the national average. This data does not include the relatively large presence of the military which is centred in the Halifax Metropolitan area. Service employment now accounts for over 80% of employment in the province, which is above the national average of 78%. This share has increased noticeably in 20 years. In 1992 the share of services in provincial employment was roughly three quarters. In terms of specific service sectors, perhaps the most fundamental impact on increased demand for services has been brought forth by an aging population in the province. In particular, the demand for Health services has increased dramatically in the province. As a reflection of this, Health employment has increased from 12% to 15% of provincial employment in two decades, and accounted for almost one-third of the employment increase over the 20-year period. Growth in other service-related sectors is also worthy of noting in the province. As part of a collaborative development strategy, an industry emerged that centred on the provision of information services through contact (call) centers in the province. Employment in Business Services, of which contact centres are an important part, grew rapidly in the province from minimal levels to over 15,000 employees in the past decade. Although this industry has contracted in recent years due to the high dollar and international competition, it still remains a significant part of the service economy in the province. Another aspect of the continued growth of employment in the Services-producing sector is the expansion of knowledge intensive industries in the province, particularly those found in Professional, Scientific and Technical Services. Growth has been relatively strong for Computer-related services and Scientific and Technical services (i.e. biotech). Growing jobs in these sectors is a provincial priority in an effort to support emerging high technology industries.

16 P a g e 16 Employment in the Goods-producing sector, however, has weakened over time in the province, particularly for the Primary industries and for Manufacturing. Employment in the Forestry industry has continued to decline in the province driven by a number of factors slowing demand for primary outputs (lumber and pulp) as well as increased mechanization in harvesting. Employment in Fishing in the province has also fallen over time, given supply constraints for groundfish and weak markets for the key lobster industry. Mining has struggled as well in the province with the closure of a large coal mine in Cape Breton and a variety of smaller mines that produced Gypsum and other products (i.e. salt and zinc). On the brighter side, the decline in the fisheries is being countered by a growing Aquaculture industry in the province, and biomass energy is emerging as a market for forestry inputs. As well, there are positive developments in offshore oil and gas that may help bring about recovery in the overall Mining industry in the province. Perhaps the most significant development in the Goods-producing sector in the province has been the decline in Manufacturing in the region. While Manufacturing accounted for 11% of employment two decades ago, currently it has fallen to below 7%. The decline has been concentrated in manufacturing of primary goods. Manufacturing of Food and Beverage products (particularly fish products) has declined significantly over time in the province, due to supply constraints and international competition. Employment in Forestry products manufacturing, particularly pulp and paper processing, has significantly been reduced over the last decade, while many sawmills in the province have closed due to slowing demand for lumber products. This past year also saw the end of oil and gas refining in the province, with the closure of the Imperial Oil refinery. Although Manufacturing remains challenged in the province, there are positive developments. The Irving Shipyard contract should give a significant boost to the shipbuilding industry in the province starting in 2016, and it is expected that this activity will spill over into other industrial sectors in the province such as in metal fabrication. There are also a variety of smaller manufacturers of innovative products emerging in the province (i.e. LED lighting systems) that should help support Manufacturing employment over the forecast period. Finally, a key Goods-producing sector that has also been challenged over the recent past and is expected to continue in decline over the forecast period is Construction. Construction accounts for over 7% of employment in the province and peaked in Since that period, a weakening of major project activity in the province, a decline in housing starts, and sagging levels of public/institutional investment have dampened prospects for the industry. In the longer term, general economic improvement, increased commercial and higher density residential development (particularly in the Halifax Area), and accommodating the longer term needs of an aging population (senior friendly housing) should help strengthen the outlook for the industry.

17 P a g e 17 Overview of Employment Outlook The scenario used to produce the sector outlooks for Nova Scotia was developed in the third quarter of The discussion that follows focuses on those specific sectors where significant trends and events of note are projected. The Nova Scotia economy faces a number of competitive pressures and is expected to grow slowly from 2013 to Employment in the province is expected to be relatively stagnant over the forecast period, growing by less than 1% comparing 2015 with This has roughly been a steady rate that the province has experienced over the last three years ( ). Nova Scotia continues to evolve as a service economy as opposed to a producer of goods. Reflecting this, employment will increase primarily in service-related industries over the forecast period, accounting for almost 80% of additional employment in the province. The greatest increase in employment in the service sector will be in Health services, driven primarily by the needs of an aging population. A Food/ Accom Fin, Ins, Real Estate Figure 3 Distribution of Employment Growth Nova Scotia Other 10% 10% 19% 10% Mining, Oil/Gas 35% 16% Health Prof, Sci & Tech much smaller, but still significant, increase is expected for employment in Professional, Scientific and Technical Services, reflecting increasing prevalence of knowledge intensive firms in the province. A more positive outlook is anticipated for Mining services, given a significant increase in offshore exploration activity and the potential for other mining ventures in the province. Finance, Insurance and Real Estate and Accommodation and Food Services are also expected to contribute to employment growth in the province from The provincial economy is also expected to receive a significant boost from the shipbuilding activity that will be undertaken in the Irving Shipyard in Halifax. However, production of the ships is not expected to begin until late 2015 and is on the outer edge of this forecast. The industrial employment outlook for shipbuilding will change significantly in our next forecast which will encompass 2016, an anticipated year of full production at the shipyard. There will be challenges for significant industries in the province over the forecast period. Employment in Construction is expected to soften due to a slowdown in residential construction and limited major project activity. Employment in Trade is also expected to weaken given high levels of consumer debt, restrained economic activity, and restructuring within the retail trade sector. Employment in Public Administration is anticipated to decline from , due to continued government budgetary restraints.

18 P a g e 18 Table 3: Nova Scotia Industrial Outlook 2012 Share of Employment Annual Average Growth Rate Annual Average Growth Rate Total, All Industries Goods-producing Agriculture Forestry, Fishing and Hunting Mining and Oil and Gas Utilities Construction Manufacturing Services-producing Trade Transportation and Warehousing Finance, Insurance and Real Estate and Leasing Professional, Scientific and Technical Services Management and Administrative Services Educational Services Health Care and Social Assistance Information, Cultural, Recreation Food and Accommodation Services Other Services Public Administration Source: Statistics Canada, Labour Force Survey; Employment and Social Development Canada, ROOCS

19 P a g e 19 Industries Projected to Grow The following industries are expected to show some substantial growth from 2013 to For this analysis, substantial growth is defined as an increase of at least 150 in employment levels. Overall, seven industries are expected to show significant growth in Nova Scotia over the next three years. Health Care Health Care will provide the greatest boost to employment growth in the province over the forecast period. The growth is driven by increasing demand for Health Care services by an aging demographic in the province. 40 Employment increases in Health Care are expected to be fairly broad within the 20 industry, with increases expected for hospitals, nursing & residential care facilities, as well as increases in Social Historical Projection Assistance (including community support services such as food banks and elderly support services.) Growth in Health services will continue to be restrained, however, by budgetary restraint given constricted government budgets and reduced public spending levels 's Figure 4 - Health Care Employment Nova Scotia Outlook (1%) Professional, Scientific and Technical Services Employment in Professional, Scientific and Technical Services is expected to add 700 jobs over the forecast period, the second largest sectorial growth in the province. This sector is comprised of a wide range of knowledge intensive activities, including Legal, Accounting, Architectural and Engineering firms, Marketing and Advertising, and Computer-related services Figure 5 - Professional, Scientific & Technical Services Employment 000's Nova Scotia Historical Projection Outlook (1.3%) Although growth in this industry grouping overall is not expected to be as robust as for the period due to slow economic growth, the outlook is particularly positive for Computerrelated services. The Computer-related service component of this industry group is expected to

20 P a g e 20 continue to strengthen over the forecast period, given the growing prevalence of technology. Slower growth is expected to be evident for the Scientific Research services, given that much of this activity is publically funded and subject to the current state of budgetary restraint. Mining, Oil and Gas Employment in the Mining, Oil and Gas industry in Nova Scotia is expected to recover and to increase modestly over the forecast period. This sector, however, is very small in terms of employment in the province. Employment growth in this sector is expected to be supported by strength in offshore oil and gas production at the Sable and Deep Panuke fields. Oil and gas development will get a significant boost with Shell and British Petroleum Oil committing over $2 billion dollars in exploration activity in the region. There is also activity in other mining sectors in the province, with the opening of the Dufferin and Touquoy gold mines. A recent survey of the Mining industry in the province indicates that the outlook for Mining is positive with a rebound anticipated in key sectors, such as Gypsum mining, as the US recovers and demand resumes for exports of gypsum wallboard. 000's Figure 6 - Mining, Oil & Gas Employment Nova Scotia Historical Projection Outlook (4.4%) Finance, Insurance and Real Estate Employment in Finance, Insurance and Real Estate is expected to grow slowly over the forecast period, adding an additional 400 jobs from Figure 7 - Finance, Insurance and Real Estate Employment Nova Scotia 's Employment is expected to slowly strengthen in Finance, which include not 15 only the banking industry but also investment and securities dealers and 0 credit financing firms. Continued strength is expected as well in the Insurance industry in the province, particularly in Historical Projection Halifax which has traditionally been the regional centre for Atlantic Canada. On a more restrained note, employment in Real Estate is not expected to grow significantly over the forecast period, given an anticipated weakness in housing sales and starts in the province. Outlook (0.8%)

21 Accommodation and Food Services Employment in Accommodation and Food Services is expected to increase over the forecast period; however, the growth rate is expected to be significantly lower than for the period. Weak levels of tourism, heavy debt levels for domestic consumers, and a slow economy have worked as serious challenges to increasing employment in this sector. P a g e 21 Historical Projection Employment in this sector is concentrated in food and beverage services (80 percent), with a smaller share being employed in hotels and inns. It is expected that the sector generally will improve over the forecast period, with an anticipated increase in tourism with the resumption of a ferry service between Yarmouth and the US. Although a weak economy has been a challenge to domestic demand for services in this sector, a gradual recovery in the provincial economy should help maintain consumer spending and support employment in food and beverage services. On the accommodation front, a number of new hotels have emerged, particularly in the Halifax area. The completion of the Halifax Convention Centre by early 2016 should also build momentum in the industry in the Halifax Regional Municipality and for the province in general 's Figure 8 - Accommodation & Food Employment Nova Scotia Outlook Manufacturing Employment in Manufacturing is expected to recover slowly over the forecast period. Manufacturing in the province has been challenged heavily by weaknesses in the traditional primary based Goodsproducing sectors over the last decade, particularly those based on forestry and fishing products It is anticipated that over the forecast period, employment in the traditional sectors will not decline further and should strengthen. As evidence of this, Nova Historical Projection Scotia merchandise exports strengthened in 2013, with paper, shellfish, and lumber contributing significantly to the improvement. In addition, it is expected that the key sector of rubber manufacturing will remain strong in the province, as evident by strong markets for tire products in the U.S. A positive but restrained outlook is also expected for emerging manufactures of a variety of products that incorporate newer technologies (i.e. electronic goods). Impetus for a recovery in manufacturing is also expected with shipbuilding work being undertaken at the Irving Shipyard, with activity really ramping up by the end of the forecast period. 000's Figure 9 - Manufacturing Employment Nova Scotia Outlook (0.4%)

22 P a g e 22 Other Services Employment in Other Services is expected to expand modestly from 2013 to This industrial sector is comprised of a wide variety of industrial activities, including Automotive Repair and Maintenance, Personal and Laundry services, and Religious and Civic Organizations. In the province, the two largest service groupings by far in this category are Repair Services and Personal Services. In both these sectors, there is a relatively high level of representation of self-employment 's Figure 10 - Other Services Employment Nova Scotia Historical Projection Outlook (0.4%) It is expected that employment in Other Services will continue to slowly expand as the economy improves. In particular, the demand for Personal Care Services (hair care and esthetic services) funeral services, and laundry services should remain strong and growth should continue. There is also some expansion projected in Other Personal Services, particularly pet care services, although many who work in these sectors may be self-employed. Industries Projected to Decline The following industries are expected to show important decline from 2013 to For this analysis, important decline is defined as a decrease of at least 150 in employment levels. Overall, only three industries are expected to show important decline in Nova Scotia over the next three years. Figure 11 - Construction Employment Nova Scotia Construction 's Employment in the Construction industry is expected to continue to decline in the province over the forecast period. The poor outlook for Construction activity reflects fairly weak levels of major project activity currently in the province. Some recovery is expected in 2014, however, with the construction of the Maritime Link, ongoing construction at the Halifax Shipyard, and the possibility of the Liquefied Natural Gas terminal in the eastern part of the province. The outlook is less optimistic for residential construction, with relatively weak 20 0 Historical Projection Outlook (-1.0%)

23 P a g e 23 levels of housing starts expected in the province, particularly in single family dwellings. On the commercial front, it is expected that the recovery from the current slump in non-residential construction investment will be challenging and will be further impacted by continued weakness in institutional and governmental investment in the province. There have been some positive developments such as the construction of the Nova Convention Centre and other significant projects in the province (i.e. Forest Lakes Golf Community), but many of these projects are longer term in nature and are projected to have limited impact over the forecast period. Trade Employment in Trade is expected to decline marginally over the forecast period. Employment in this industrial category is comprised primarily of Retail Trade, which makes up well over 80% of employment. Although there have been several high profile entrants into the provincial retail trade environment, such as Target, this has generally come at the expense of existing retail operators. With a fairly weak economy, and generally high levels of consumer debt, it is not expected that retail trade employment will regain the record high employment levels experienced between 2006 and A boost to retail sales was expected with an announced cut in the HST by one percentage point, but this decrease is now on hold until the fiscal position of the provincial government improves. A further factor which will challenge retail sales employment is an apparent move toward online shopping by consumers, with several large retailers, such as Best Buy, re-profiling their operations to focus increasingly on online sales and away from retail storefront operations 's Figure 12 - Trade Employment Nova Scotia Historical Projection Outlook (-0.2%) Public Administration Employment in Public Administration is expected to continue to decline between 2013 and Employment in this industry group is heavily comprised of Federal public service employees, where roughly half the public sector is employed in the province. Employment declines are anticipated as governments at all levels contend with relatively large budget deficits and try to improve their fiscal positions Figure 13 - Public Administration Employment Nova Scotia 's Historical Projection Outlook (-0.3%)

24 P a g e 24 Industries with No Significant Change The industries listed in this section are considered to show no significant change over the forecast period ( ). The threshold used to determine little or no significant change was a change of 150 in employment levels or lower over the three year period. The following sectors are not expected to demonstrate any significant change in employment over the forecast period. They include: Agriculture; Forestry and Logging; Fishing; Utilities; Transportation and Warehousing; Management and Administration Services; Educational Services; and Information, Culture, and Recreation.

25 P a g e 25 Conclusion In conclusion, the provincial economy has been restrained over the most recent years, but it is expected to begin to improve over the period. The improvement is anticipated to rest heavily on a recovery in spending on major projects in the province, particularly the shipbuilding contract, where work is expected to commence in late Other significant projects, such as the Maritime Link and various large commercial/industrial projects, should also lead to an improved economy over the forecast period. Reflecting the rebound in the provincial economy, the labour market is expected to grow slowly from and generate a moderate amount of employment growth. Many of these job opportunities will be in the Health Care industry, which will account for much of the expansion in employment in the province. Job growth will also be evident for the Professional, Scientific & Technical sector in the province, as well as for the Mining, Oil and Gas industry and to a lesser degree Finance, Insurance & Real Estate and Accommodation and Food Services. On a less positive note, employment is expected to continue to weaken in the Construction sector in the province and to slowly decline for Trade over the forecast period. Note: In preparing this document, the authors have taken care to provide clients with labour market information that is timely and accurate at the time of publication. Since labour market conditions are dynamic, some of the information presented here may have changed since this document was published. Users are encouraged to also refer to other sources for additional information on the local economy and labour market. Information contained in this document does not necessarily reflect official policies of Employment and Social Development Canada. For further information, please contact Randy Jewers (randy.jewers@servicecanada.gc.ca) or the LMI team at: lmi-imt@jobbank.gc.ca For information on Statistics Canada products, please visit the Statistics Canada Web site at: Her Majesty the Queen in Right of Canada as represented by Employment and Social Development Canada, 2014, all rights reserved