APEC’s outlook for New Brunswick

Sound familiar?

Employment growth in New Brunswick has tapered off in 2008 after strong gains throughout 2007. Average employment levels during the first three quarters were still 1.1% higher than in 2007, but this is well below the 1.8% national increase. The unemployment rate has increased by almost one percentage point to 8.5% as the rate of job creation failed to keep pace with labour force growth that was boosted by an increase in the participation rate. Most of the employment gains came from health care and public administration, while there were fewer jobs in manufacturing and business services.

Economic growth in New Brunswick is expected to slow to 1.1% this year as higher non-residential investment activity is offset by lower export volumes. Economic growth will weaken to 0.4% in 2009 as major project investment tails off, consumer spending slows and exports continue to struggle.

This is a sobering assessment of things to be sure. The limited employment gains in 2008 over 2007 have come from health care and public administration employment. You can’t generate private sector economic development by hiring more public sector workers.

As for the future, the decline in economic growth will necessitate cuts in government spending (as well as the reining in of equalization announced yesterday). I hope economic development is not on the chopping block but it has always been an easy target.