Mixed economic bag for NB as inflation continues

It’s a mixed bag when it comes to New Brunswick’s economy according to a new report from the Atlantic Provinces Economic Council.

The report says that while New Brunswick is experiencing low unemployment and high immigration, the positives are tempered by a growing housing and cost of living crisis.

The overall picture seems to be made up of positives and negatives.

For example, the unemployment rate is at 7.4%, its lowest level in 46 years.

Information Morning – Fredericton11:27​Spring Economic Report

Last year’s strong economic recovery continues into 2022, but high inflation and labor shortages pose risks to growth in Atlantic Canada. ​Fred Bergman​, ​senior policy analyst for APEC​​, examines New Brunswick’s economy.

But an aging population may explain the low unemployment rate, as retirees and people not actively looking for work are not included in the rate.

The aging population — about one in four New Brunswickers are between the ages of 55 and 64 — means the labor shortage will get worse before it gets better.

“These labor shortages … may impact the ability of the economy to continue its recovery at a rapid pace,” said Fred Bergman, senior policy analyst at the Atlantic Provinces Economic Council.

“We are seeing vacancies in sectors like manufacturing, retail, trade, health and social care, healthcare, nurses, doctors etc. and care workers. residence.”

Slot numbers

At the start of the pandemic, the province experienced a boom in home sales, with out-of-province homebuyers spending big on housing.

But this has been limited recently for two reasons: the rising cost of housing, which makes buying a home unaffordable, and a housing shortage, which means that many people looking to buy a home cannot afford it. find, regardless of price or ability to pay.

Home sales fell 20% in the first quarter, but this has more to do with a lack of homes than weak demand. (Reuters)

“I think in Fredericton in particular, through April…existing home sales were down almost 20%. This is obviously partly due to the fact that [if] you have fewer homes for sale, you will also have fewer sales,” Bergman said.

“The existing home price index is up over 30% in Fredericton. So, you know, there’s definitely a different dynamic between the existing home market and the new home market.

The woes of inflation

National inflation is around 5% for the year.

For Atlantic Canadians, this means that approximately $1,600 more in annual expenditure will be required to obtain the same amount of goods and services as the previous year.

This is less than in the rest of Canada, but only because Atlantic Canadians have lower wages on average than other Canadians and therefore have less to spend.

Fred Bergman, senior policy analyst at the Atlantic Provinces Economic Council, said inflation will get worse before it gets better. (APEC)

Bergman said inflation will likely get worse before it gets better, and while some governments have put in place targeted aid, it’s a drop in the bucket compared to the financial hardship Canadians are feeling. of the Atlantic.

“In New Brunswick, I believe $40 million was allocated in the budget to increase the basic personal amount of personal income tax as well as to increase the tax reduction for low-income people. , which will save New Brunswickers…about $85,” Bergman said.

“When you compare that to $1600, there’s a big difference there.”

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