COVID-19 Economic Recovery Tracker

Every facet of life has been changed by the pandemic, from how we live, to how we work. What impacts has COVID-19 had on Halifax's economy? Find the latest economic data and analysis here.

How is Halifax’s Economy Changing?

COVID-19 has brought a sea change and created new economic conditions across the globe and here in Halifax. This Tracker examines the economic toll of the pandemic, Halifax's pace of recovery, and our resilience in the face of ongoing COVID developments. There may be lingering effects of the pandemic and more economic uncertainty as we recover from a second wave of COVID cases across the country.

Perhaps the most important factor affecting Halifax and its economy is the current state of public health. The Province of Nova Scotia has created a new dashboard on case counts and health statistics relating to COVID-19. Statistics Canada also produces a dashboard of the effects of COVID-19. This shows a broader, national picture of how COVID is affecting the economy and how the Canadian economy is recovering.

Employment

COVID-19 has had an immense effect on Halifax’s labour market and employment figures. Although the effects are different across industries, overall our economy saw a massive 10% loss in total employment at its lowest point. Young people are one of the groups most negatively impacted and female employees have been more impacted than male employees. Further, an increase in COVID cases in November has led to new economic restrictions. As the city recovers through this second wave of cases, we will provide analysis and commentary on the changes.

Government support programs such as Employment Insurance, and previously the Canada Emergency Response Benefit (CERB), provide income relief to those who have lost their income due to COVID-19. The number of Canadians and Nova Scotians who have accessed these programs is a useful barometer of how many have been affected by the downturn and lost their income.

  • Source: Statistics Canada, Labour Force Survey, Table 14-10-0378-01

    Cumulative Change in Employment Since January 2020

    Why is this important?

    This chart looks at the cumulative monthly change in the number of employed workers in Halifax since January 2020 (pre-COVID restrictions). Tracking changes in total employment provides a broad overview of the effects that COVID-19 has had on people in our city.

    How is Halifax doing?

    Between January 2020 and May, employment in Halifax dropped by 23,200 workers, a massive 10% loss in total employment. In terms of percentage employment losses, these were in the lower third of Canadian cities. This means two-thirds of Canadian cities experienced proportionately worse employment losses than Halifax.

    Halifax’s total employment rebounded by 27,800 workers between May and the following January, a positive sign of recovery. This puts Halifax 2.0% above its employment level in January 2020, proportionately the strongest recovery among cities in Canada. While some industries are recovering more quickly than others - many have even grown since the beginning of COVID-19 - total employment levels are returning to normal.

    What are we watching for?

    Halifax has seen a rapid pace of recovery since its low-point in May. However, a mid-November increase in COVID cases, often deemed a "second wave", has led to additional restrictions on the economy. This led to a decline in employment in December and a slower pace of growth overall. However, January 2021 employment has risen by 1,400 jobs, signaling a return to growth. The relatively small impact on the economy was likely caused by the quick response from the community and public health in getting the second wave of COVID cases under control. As the health situation continues to improve, the effects on employment will continue to affect the data in the near-term. We will continue to track the situation as it unfolds, looking especially at how different sectors of the economy are affected. The Industries section below explores these changes in more detail.

  • Source: Statistics Canada, Labour Force Survey, Supplementary Indicators - Custom Tabulation

    Labour Underutilization Rate

    Why is this important?

    The labour underutilization rate provides a nuanced picture of the labour impacts of the recession. It is a special measure that Statistics Canada is using to track COVID-19’s impact on employment. The rate combines the number of people who are not working but wish they were, with the number of people who are working far fewer hours than usual, then compares these underutilized workers to the total number of employed and available workers (read more). This can help us understand how much the recession has affected employment in cases like COVID-19, where the unemployment rate provides an incomplete picture.

    How is Halifax doing?

    In 2019, before COVID restrictions, Canada’s labour underutilization rate averaged 11.7%. By April 2020, near the depth of the recession, over one-third (37.6%) of Canada's labour force was underutilized. This rate decreased slowly and consistently each month until November, where it reached a low of 16.2% and began to rise in the face of a second wave of COVID cases. As of January 2021, the labour underutilization rate stands at 19.9% - roughly one in five workers.

    The Nova Scotian situation has been similar, reaching an all-time high in April at 38.4%. However, its outlook looks slightly better than the national picture. The most recent data for January 2021 put the province's underutilization rate at 17.5%, as COVID cases continue to abate. While the most recent data are not available for Halifax, historical comparisons put its underutilization rate consistently 100 to 300 basis points below the provincial average. Given the health situations in Halifax and Nova Scotia are inextricably linked, they will likely see similar labour market responses to the pandemic. It is very likely the current underutilization rate in Halifax is lower than both the provincial and national rates and that the city has a similar outlook to the province.

    What are we watching for?

    We expect the underutilization rate to improve gradually through the rest of the year as workers return to the workplace, gain back their usual working hours, or find new employment. However, this rate will remain above historic norms until widespread vaccine distribution occurs in the province. As the rest of the country continues to face challenges with its public health situation, the gap between the national and local rates may diverge further. Overall employment has grown and this is positive sign, but the underutilization rate remains above normal and demonstrates that economic recovery is still a work in progress.

  • Source: Statistics Canada, Labour Force Survey, Table 14-10-0378-01

    Cumulative Change in Employment Since January 2020 by Age Group

    Why is this important?

    Tracking employment by age group shows us how different cohorts are being affected by COVID. If a specific group is particularly worse off due to COVID, or slow to recover, we should monitor it carefully.

    How is Halifax doing?

    Despite representing only 12% of the workforce, youth workers (ages 15-24) accounted for 49% of all layoffs between January 2020 and May 2020. 11,300 fewer youth workers were employed in May as compared to January 2020, a 30% reduction in the number of youth workers. The over-representation of youth is likely due to retail stores and restaurants shuttering their doors. July brought good news for many of these youth, as 6,300 youth returned to work. However, October saw an additional - and unexpected - 2,000 youth losing their jobs.

    Between January 2020 and January 2021, Halifax has seen recovery and growth for those ages 25 to 54 (up 8.1%) but a decline in employment for those ages 55 to 64 (-13.0%). The number of workers over the age of 65 has remained relatively unchanged, and has largely recovered from the seasonal dip we typically see in September and October. Employment over the age of 65 is equal to its January 2020 level, though it had fallen by as much as 6.1% in September 2020.

    What are we watching for?

    January's employment numbers are a mixed sign for overall recovery. While total employment has climbed and recovered, specific age groups are still well behind where they were last year. Total employment remains above its January 2020 level, while employment for those ages 15 to 24 and those ages 55 to 64 are well below other age groups. Both of these age groups experienced a noticeable decline from the second wave of COVID cases, hitting a low point in November and December. The current trajectory of recovery is promising, but as we enter the new calendar year, we are keeping a close eye on these differences.

  • Source: Statistics Canada, Labour Force Survey, Table 14-10-0378-01

    Employment by Sex

    Why is this important?

    By delineating changes in employment by sex, we can get a sense of how COVID layoffs are affecting men and women differently. Women face higher levels of job insecurity in Canada; they are more likely to work part-time jobs than men, more likely to be employed in lower wage positions, and remain vastly underrepresented in leadership positions (read more).

    How is Halifax doing?

    Not only do women remain underrepresented in Halifax’s labour force, COVID-related layoffs and reductions in working hours have impacted more female employees than male employees. Between January 2020 and May (the deepest month of layoffs), male employment dropped by 9,500 workers while female employment dropped by 13,700 workers. On a positive note, both male and female employment totals are recovering rapidly, with January 2021 employment 1.5% above its January 2020 level for males and 2.4% above for females. The gap between male and female employment narrowed between August and November, but has widened again in December and January 2021. It is unclear whether this is a systemic shift, a seasonal shift, or differences in how industries are recovering.

    What are we watching for?

    Women continue to face systemic barriers to labour force participation. Given the disproportionate effects that COVID layoffs have had on female employees, special attention ought to be paid to known barriers such as the availability and cost of childcare. These factors may affect the resiliency of female employment in the face of future crises. As we see more COVID cases, these differences may be exacerbated.

Industries

Coronavirus is significantly impacting most industries, though not equally. Tracking employment changes and sales by industry helps us broadly understand which sectors were most heavily impacted. Some industries - notably tourism and hospitality - are particularly hard hit and will recover more slowly than the economy as a whole.

Our partners at the Canadian Federation of Independent Business (CFIB) regularly consult and survey their member businesses. You can see the results of their surveying on business confidence and how businesses are responding to COVID-19.

  • Source: Statistics Canada, Labour Force Survey, Table 14-10-0379-01

    Cumulative Change in Employment Since January 2020 by Industry

    Why is this important?

    COVID restrictions did not affect all industries equally. Tracking the changes in employment by industry helps us broadly understand which sectors were most heavily impacted by layoffs and how well they are recovering.

    How is Halifax doing?

    The accommodation and food services industry as well as the wholesale and retail trade industry experienced the heaviest losses, losing a total of 7,600 and 7,300 employees by May 2020, respectively. Employment in wholesale and retail trade improved throughout the summer, but has struggled to recover since an initial peak in August. Accommodation and food service, which had been slower to recover initially, had been continuing a steady climb towards normal. Unfortunately, the recent increase in COVID cases led to a sharp decline in accommodation and food service employment in December and January. Most other industries suffered fewer losses in total employment, with many industries losing fewer than 2,000 employees at their worst point. Both recovery and seasonal employment have contributed to overall growth. Employment in January 2021 is 1.9% above its January 2020 level.

    What are we watching for?

    Halifax is clearly recovering with employment in many industries above the pre-COVID level, but this must be observed with caution. There have been additional economic restrictions put in place due to the recent increase in COVID cases and we are seeing how these are affecting the economy. Certain industries - such as accommodation and food services - have borne a disproportionate share of the losses, especially during this second wave of COVID cases. While most industries have settled into a new normal we should pay special attention to those industries that have not.

  • Source: Statistics Canada, Retail Trade Survey, Table 20-10-0008-01

    Retail Sales by NAICS Industry

    Why is this important?

    Retail sales are a useful barometer of economic activity, as they closely track how much consumers are buying overall. Retail sales can show whether consumers are confident enough in the economy to make major purchases and illuminate which kinds of products consumers are choosing to spend more of their money on. Detailed sales categories can show how disruptions may be affecting one industry over another.

    How is Halifax doing?

    While detailed data are not available for Halifax, we can examine how Nova Scotia’s retail sales are doing to provide insight into Halifax’s economic health. Nova Scotia retail sales fell significantly in April 2020, to 30% below their April 2019 level. May and June saw strong rebounds, followed by several months of low-to-no growth. Between January 2020 and December 2020, overall retail sales have increased by 29.9%. This is to be expected as the economy was heading into the holiday season. A more apt comparison, to December 2019, shows sales have increased by 5.5%.

    What are we watching for?

    Overall retail sales paint a generally positive picture, but it is also important to look more closely at specific industries. If an industry has been especially hard hit or is slow to recover, it may need special attention as we recover from the second wave of COVID cases. We can see most of the losses in March and April came from motor vehicle sales and three other industries: gasoline stations, clothing stores, and sporting goods. Comparing December 2020 to December 2019, only these three industries are still below their 2019 levels. In contrast, many industries are up more than 10%, including motor vehicles, furniture, electronics, building materials, food and beverage, and miscellaneous merchandise.

    These trends in sales are understandable in light of the changes people have made to their daily lives during the pandemic. Less driving to work and reduced business and vacation travel means less gasoline is purchased. More working from home reduces the need to spend on work wardrobes. More time at home means more activity in terms of home entertainment, repairs, renovations, and more home-made meals.

Debt

Debt is an important economic indicator to measure how families and businesses are handling the downturn. Surprisingly, we have yet to see the debt-related issues we might have expected from an economic downturn. Business and consumer insolvencies in Halifax have been low in 2020, lower than comparable metrics for 2019.

Government support programs have also played a role in household debt. These supports can mitigate how much debt consumers take on, but are also temporary. As these programs wind down, the debt and insolvency situation may change and it is important to continue tracking the situation.

  • Non-Mortgage Consumer Debt Statistics

    Why is this important?

    Debt is a measure of how much individuals are spending above and beyond what they receive in income. As individuals lose their jobs due to COVID their incomes decrease and they must take on more debt or reduce their spending. While some level of debt is actually a good sign in a healthy economy, we should be concerned if household debt begins to rise suddenly or unexpectedly.

    How is Halifax doing?

    Indicators suggest that debt levels are actually dropping, with non-mortgage debt at $22,873 per consumer in Q3 2020. This is down from an average debt of $23,610 over the course of 2019. Delinquency rates dropped precipitously, falling by nearly a third this past quarter, to 1.08% in Q3 2020. This means that fewer consumers are being overwhelmed by debt. As debt and delinquency fall in the face of a recession, it may indicate consumers are spending less and adapting to lower incomes - saving money they would have otherwise spent on dining out or travel. It may also indicate that incomes are recovering quickly enough to avoid taking on more debt, or that government programs have supported household incomes during the crisis.

    What are we watching for?

    It is difficult to interpret why debt-loads have decreased in the face of a crisis. Without a clearer understanding of why this has happened we cannot say for certain that it is good news, but it is the absence of bad news. It will be important to watch this indicator moving forward to ensure that debt-loads remain low and do not rise suddenly or unexpectedly. These results show a promising trend.

  • Consumer Insolvencies by Type

    Why is this important?

    Consumer insolvencies show how many families have been unable to make payments on their debts. If families can endure a recession by taking on debt, it indicates they have been able to manage the impacts without lasting damage. Insolvencies occur when the amount of debt they have taken on is overwhelming and the recession will cause lasting damage. Therefore, insolvencies give us an idea of how much long-term damage a recession might cause.

    How is Halifax doing?

    Consumer insolvencies in Halifax remained low in 2020. There were only 296 bankruptcies and insolvency proposals in Q4 2020, well below the average of 508 insolvencies per quarter since 2015. While these data do not raise alarm bells, it is possible that the impacts of COVID on the economy and insolvencies could take a longer time to resolve.

    What are we watching for?

    The low number of insolvencies is a good sign, and we have not seen a spike in insolvencies through 2020. It is looking more likely that Halifax will be able to withstand the economic downturn and that the lasting, debt-related harms will be mitigated. However, it is still important to keep track of whether insolvencies increase as the economy continues to recover. These metrics provide insight into how severely the COVID crisis has affected families, as well as if government support programs have been able to mitigate the long-term damage caused by the downturn.

  • Business Insolvencies by Type

    Why is this important?

    Similar to consumer insolvencies, business insolvencies show how many businesses cannot make payments on their debts. If businesses can endure a recession by taking on debt, it indicates they have been able to manage the impacts with minimal lasting damage. When facing insolvency, businesses will often close, leading to layoffs and job losses. Therefore, insolvencies give us an idea of how much long-term damage a recession will cause.

    How is Halifax doing?

    Business insolvencies in Halifax remained low in 2020. There were 3 bankruptcies in Q4 2020, well below the average of 8.4 insolvencies per quarter since 2015. This is a good sign, but it is possible that the impacts of COVID on the economy and insolvencies could take a longer time to resolve.

    What are we watching for?

    The low and stable number of insolvencies is a sign of economic health and good credit conditions. It means businesses have been able to take on the debt they need to stay in business and may have avoided long term damages. This provides insight into how severely the COVID crisis has affected businesses, as well as if businesses have been able to access the credit and liquidity support they need to stay in business. It is important to keep track of whether insolvencies begin to increase as COVID continues.

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