4th COVID wave crest indicates smoother navigation for New Brunswick
With a 14-day case rate of 157 per 100,000 population compared to 116 per 100,000 nationwide, it’s clear that the fourth wave of COVID-19 has hit New Brunswick hard. In the face of this headwind, overall hiring in the province has remained stable over the past 11 months while the unemployment rate, currently 9.3%, is the third highest in the country, and well above the national average, now 6.9%. Although the overall employment statistics are rather grim, a closer look reveals that full-time hiring has increased by 3,000 jobs to date, mainly thanks to gains in public administration, education services and housing. Also, according to the Canadian Federation of Independent Business, full-time staffing plans in the province are the highest since mid-2019.
Affordable housing a big draw
While the onslaught of successive waves of COVID-19 has significantly slowed job growth in New Brunswick over the past year, it has had little impact on the influx of migrants from other provinces as well. than outside of Canada. A recent Royal Bank of Canada (RBC) report titled A Regional Renaissance: More Canadians Attracted to Living on the Atlantic Coast During the Pandemic indicates that affordable housing in the region has been a major draw for individuals and families. According to RBC, Saint John, New Brunswick is the most affordable census metropolitan area in Canada. During the first half of this year, net interprovincial migration reached a record of 3,300 people, to which is added an increase of +2,898 in net international migration.
Housing starts at their highest for 10 years
Driven by the large influx of people from out of the province, the persistently low interest rates and the aforementioned very affordable home prices, sales of existing homes since the start of the year in NB. are up + 31% compared to the first nine months. 2020 and + 39% over the same period in pre-pandemic 2019.
As a result of this exceptionally strong increase in demand, the monthly supply of homes for sale has fallen, over the past year, from a high of 9.4 induced by COVID-19 in April 2020 to a low. record 2.3 in September 2021. During the same period, the average price of homes in the province accelerated from no year-on-year change in April 2020 to + 22.4% in the last month. That said, the average New Brunswick home price of $ 256,000 is the lowest among the provinces and well below the national average of $ 689,303.
Stimulated by the surge in demand, housing starts in New Brunswick since the start of the year are up + 15% from 2020 and + 34% from 2019. Housing starts single, semi-detached and row homes are up + 58%, more than offsetting a -13% drop in apartment starts. Given the strong + 32.4% increase since the start of the year in residential construction approvals, housing starts in New Brunswick are expected to total in the order of 4,100 to 4,300 units this year, and 3,900 to 4,100 units in 2022 compared to 3,500 units in 2020.
Despite poor job gains in recent quarters, consumer spending, as reflected by retail sales in New Brunswick, has increased + 16% since the start of 2020 and + 13% compared to the first seven months before the 2019 pandemic. While the bulk (52%) of the increase in retail sales this year has been in motor vehicles, sales of home-related goods , including furniture and fixtures (+ 45%) as well as building materials (+ 18%) were also strong, in line with the healthy pattern of home sales.
New Brunswick exports fueled by rising oil prices
From an external perspective, due in large part to the strong demand for petroleum products in the United States, New Brunswick’s merchandise exports are up + 51% year-to-date after s’ be contracted by -23% in 2020. Other products that have headed south across the border in significant volumes since the start of this year are seafood (lobsters and salmon), lumber and liquid natural gas.
The very sharp rise in global energy prices over the past 12 months and a growing consensus that prices will rise further due to a significant slowdown in energy investments point to a further increase in the value of New Zealand’s exports. Brunswick until 2023.
CAPEX to resume in 2021 and 2022
After posting strong gains of + 19% y / y in 2017 and + 13% in 2018, capital spending fell by -10% in 2019 and by the same percentage again in 2020. However, despite the persistent drag of COVID-19 on the economy activity since March 2020, two recent surveys of capital spending in the province indicate an increase. First, the Statistics Canada report Non-residential capital and repair expenditures The survey indicates that public and private spending will show a gain of + 10% this year. Second, the most recent survey of major projects conducted by the Atlantic Provinces Economic Council indicates that investment in the province will increase by + $ 2.2 billion, its average level over the past ten years.
Major projects underway or planned in the near term include the Atlantic Science Enterprise Center, the modernization of the Port Saint John container terminal and the modernization of the Saint John pulp mill. Other projects approved or near-approved include the Mactaquac Generating Station Upgrade, the Sisson Mine Project and the NB Power / Moltex Energy Small Modular Reactor Project.
John Clinkard has over 35 years of experience as an economist in international, national and regional research and analysis with leading financial institutions and media in Canada.
Real gross domestic product (GDP) growth * –
New Brunswick vs Canada
* “Actual” is after adjustment for inflation.
Data sources: Actual data – Statistics Canada; Forecast – CanaData.
Graphic: ConstructConnect – CanaData.
Please click on the following link to download the PDF version of this article:
Economic overview Vol. 19, issue 20 – 4th COVID wave crest indicates smoother navigation for New Brunswick – PDF