Data from Statistics Canada on Thunder Bay's unemployment rate, employment and labour force suggest that its economy is experiencing a rebound after quite a few years of slow performance. The most recent unemployment rate in Thunder Bay for May 2012 came in at 5.7 percent, which is well below the national and Ontario unemployment rates. Of course, one of the reasons our unemployment rate is so low is that the labour force has not been growing as fast as employment but the last twelve months suggest that employment has actually begun to grow faster than the labour force.
Figure 1 shows unemployment rates (seasonally adjusted) for Canada, Ontario, Thunder Bay and Greater Sudbury for the 2009 to 2012 period on the left and total employment (seasonally adjusted) for Thunder Bay over the same period on the right. As can be seen, the period from June 2011 to January 2012 saw robust increases in employment followed by a decline since. Overall, employment levels in Thunder Bay are the highest that they have been in the last three years.
Figure 1
The second figure shows annualized growth rates (May to May) for 2010, 2011 and 2012. Thunder Bay's labour force actually shrank in both 2010 and 2011 but it grew substantially in 2012 - along with employment. Employment in 2012 grew by 5.3 percent while the labour force grew by 3.8 percent. As a result, the unemployment rate dropped below 7 percent in 2011 and in 2012 has fallen below 6 percent. However, the total level of employment in May 2012 is 61,500 - which is still down from the high of 67,400 reached in March 2003 but up from a low of 57,400 as recently as June 2011.
Thunder Bay's economy appears to have begun to recover from the forest sector collapse but still has ground to go. Moreover, its employment still seems to be subject to somewhat erratic fluctuations. While June 2011 to January 2012 saw a period of sustained increases, employment has declined since then. Thunder Bay is still very much an economy in transition.
Figure 2
Northern Economist 2.0
Friday 15 June 2012
Friday 1 June 2012
Northern Economist on Manufacturing Decline in the Financial Post
FP Comment
Everybody’s Dutch
Special to Financial Post
May 29, 2012 – 7:51 PM ET
By Livio Di Matteo
The Great Canadian Angst over the
decline of manufacturing must be tempered with evidence on two fronts. First,
the decline as represented by Canada’s share of GDP in manufacturing has been
in progress since the end of the Second World War. Second, when examined in an
international context, Canada’s performance is not that different from the
advanced economies that we usually compare ourselves with.
Manufacturing’s share of Canadian GDP
rose from 20% in 1926 to a peak of nearly 30% during the Second World War. From
an average of 26% during the 1940s, the manufacturing-to-GDP ratio dropped to
23% by the 1960s and reached 17% during the 1980s. The period from 1980 to 2000
saw a stabilization of that ratio at about 17%, with the decline resuming in
the first decade of the 21st century. Between 2000 and 2010, the ratio averaged
14%.
Despite the long-term decline in the
manufacturing-to-GDP ratio, the stabilization of the ratio between 1980 and
2000 has become the new “benchmark.” This stabilization occurred during a
period of substantial currency depreciation against the U.S. dollar. From the
end of the Second World War to the early 1970s, the value of the Canadian
dollar relative to the U.S. dollar was close to par. The period from the 1970s
to 2000 saw depreciation, but since 2000 the currency has appreciated and is
back where it was for much of the 1945-75 period. The recent plunge in the
manufacturing-to-GDP ratio is associated with this appreciation and the Western
resource boom, but this “Dutch disease” relationship is at best a short-term
correlation.
Manufacturing as a share of GDP in
Canada has been in decline since the end of the Second World War from a peak
generated by wartime-driven industry. Until the Second World War, the
manufacturing-to-GDP ratio had ranged from 20% to 25% since the 1870s. Relative
to the period from 1980 to 2000, the current manufacturing decline is
understandably a cause for concern. However, viewed over a longer time span, it
is a process much like agriculture’s decline as a share of employment and
output as we moved from the 19th to the 20th century.
That this
decline is part of a long-term process of economic change and development is
evident with comparisons to other economies. The accompanying figure uses data
from the United Nations for the period 1970 to 2010 to calculate the
manufacturing-to-GDP ratios for Canada, the other six G7 countries as well as
Brazil, China, India, Australia and the Netherlands, whose experience with
North Sea oil in the 1970s led to the coining of the term “Dutch disease.”
Japan and Germany have traditionally
had the highest G7 manufacturing-to-GDP shares, but nevertheless declined from
35% and 31% respectively in 1970 to 20% and 19% by 2010. Over the same period,
Italy went from 25% to 15%, the United States from 24% to 13%, Great Britain
from 29% to 10%, France from 22% to 10% and Canada from 19% to 11%. In 1970,
Canada already had the lowest manufacturing-to-GDP ratio of the G7 countries.
Manufacturing in Australia and the Netherlands had comparable performances to
the G7.
As for advanced developing countries,
Brazil paralleled the performance of the G7, going from a manufacturing-to-GDP
ratio of 25% in 1970 to 13% by 2010. China and India, on the other hand, have
maintained their manufacturing sectors relative to their GDP. However, India’s
manufacturing-to-GDP share performance is exceptional at only 13% in 1970 and
again in 2010. China is also an exceptional performer with a high
manufacturing-to-GDP ratio of 37% in 1970 and a small decline to 33% by 2010.
The decline of Canada’s manufacturing
sector parallels Australia, which can be viewed as a resource-exporting
country, but it also parallels France, Great Britain and Italy, which are not
viewed as natural resource-driven economies. Generally speaking, all developed
economies have seen declines in their manufacturing sector’s share of GDP over
time. A high manufacturing-to-GDP ratio is often more representative of an
earlier stage of economic development — the transition from agricultural to
industrial development. These changes are really better viewed as an economic
evolution.
Financial
Post
Livio Di Matteo is professor of economics at Lakehead University and a contributor to the economics blog Worthwhile Canadian Initiative.
Tuesday 29 May 2012
The North and Population Aging
The 2011 Census results for population age are out from Statistics Canada today and Canada is indeed a much older place than the last census in 2006. The proportion of population aged 65 and over is now 14.8 percent, up from 13.7 percent in 2006. The results for Northern Ontario suggest that the North is older than Canada as a whole. A ranking of Canadian CMAs (Census Metropolitan areas) and Northern Ontario CMAs and CAs (Census agglomerations) show the Sault is the oldest major city in the North with 19.3 percent of its population aged 65 years and older. Thunder Bay is next at 17.2 percent followed by North Bay at 17 percent. Sudbury is next at 16.1 percent with Timmins the youngest at only 13.8 percent. For Canada's CMAs as a whole, the oldest is Peterborough at 19.5 percent and the youngest is Calgary at 9.8 percent. Indeed, Calgary, Edmonton and Saskatoon, out in the booming west with its influx of young migrants - are the three CMAs with the lowest share of population aged 65 and over. Additional note, I've left Elliot Lake (a northern CA) off of this graph. Its proportion of population aged 65 and over is 35.1 percent but then it has become a retirement community.
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