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Manufacturing and oil and gas jobs recovering, but slowly

Manufacturing and oil and gas jobs recovering, but slowly

Posted on: 10/17/2017 | Author: ATB Financial's Economics + Research Team

Between 2014 and 2016, the average* number of people employed in Alberta fell by 0.5 per cent (10,800 jobs).

But not all sectors of the economy experienced the downturn in the same way. The oil and gas extraction sector was the hardest hit with the average number of jobs dropping by 22.5 per cent (39,500) followed by a drop of 20.1 per cent (29,000) in the manufacturing sector.

Similarly, the effects of the recession were not evenly spread across the province. We don’t have data for all communities in the province, but the data on hand show that jobs in Edmonton’s oil and gas extraction sector contracted by 28.0 per cent (8,900) between 2014 and 2016 compared to 13.1 per cent in Calgary (8,000). Employment in the rest of the province’s oil and gas extraction sector fell by 27.4 per cent (22,600).

Employment in Edmonton’s manufacturing sector shrank by 26.9 per cent (15,300) between 2014 and 2016 while Calgary’s contracted by 16.9 per cent (8,300). The drop was 14.0 per cent in the rest of the province (5,400).

The greater loss of jobs in Edmonton’s manufacturing sector during the recession is explained in part by the fact that a larger proportion of manufacturing employees in the city work for businesses linked to the oil patch. The latest data on hand are from 2012 but the basic picture is unlikely to have changed much since then: 51.0 per cent of manufacturing jobs in Edmonton were in the petroleum, fabricated metals and machinery subsectors compared to 37.7 per cent in Calgary and 26.1 per cent outside the two cities. Many of these businesses were forced to shed jobs when demand for manufactured products such as fabricated metals and machinery fell along with oil prices.

So far in 2017, we’ve seen job growth in both the oil and gas extraction sector and the manufacturing sector of over 5.0 per cent (September 2017 compared to September 2016) but we are still a long way from replacing all the jobs lost in these sectors since 2014.

*Please note that these statistics refer to the average number of people employed over the course of a year and not the actual number of people who lost a job at some point during the same period.

Employment plan in Alberta, graph

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