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 and a third of its potential workers underutilized at its lowest point. Young people and those approaching retirement are among the groups most negatively impacted and female employees have been more impacted than male employees. While economic recovery has been rapid, the increases in COVID cases in November, and again in April, have led to new economic restrictions. As the city recovers from a third wave of cases, we will provide analysis and commentary on how these changes affect the economy.

  • 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 and May 2020, 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 29,400 workers between May 2020 and March 2021, but a third wave of COVID cases has thrown cold water on this economic revival.

    Overall employment has declined by 4,300 positions since March. Total employment in Halifax remains 0.8% above its pre-pandemic level, but recent declines show the impact of the third wave. Improving case count and vaccination statistics, however, suggest that employment conditions also will improve soon. As we recover from this recent wave of cases it is important to continue to recognize that some industries are recovering more quickly than others - many have even grown since the beginning of COVID-19 - but certain industries and segments of the population are at a greater risk of economic damage and warrant special attention.

    What are we watching for?

    Halifax has seen a rapid pace of recovery since its low point in May 2020, despite a minor disruption in November. The relatively small impact on the economy was likely a function of the quick response from the community and public health officials in getting the second wave of COVID cases under control. The city demonstrated that if it can get a handle on the public health situation, economic recovery is not far behind. As we recover from a third wave of cases the situation and lessons appear similar. 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 situation in Halifax has been similar, reaching an all-time high in April at 35.4%. However, the city's outlook looks better than the national picture, due to fewer overall COVID cases. The most recent data for January 2021 put the city's underutilization rate at 15.5%, as COVID cases continue to abate. Halifax's underutilization rate has closely tracked the provincial average and is typically 100 to 300 basis points lower.

    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 across the province. As the country continues to face challenges with its public health situation, underutilization will remain higher than normal. 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 shutting their doors. July brought good news for many of these youth, as 6,300 youth returned to work. However, additional declines since September 2020 (down 5,600 jobs) indicate continued difficulty among youth in achieving job stability. In particular, April and May of this year have seen a marked decline in youth employment.

    Between January 2020 and May 2021, Halifax has seen recovery and growth for those ages 25 to 54 (up 7.5%) but a decline in employment for those ages 55 to 64 (down 6.3%). Employment over the age of 65 is down 300 jobs (down 3.0%) from its January 2020 level, though it had fallen by as much as 6.1% during its seasonal dip in September 2020.

    What are we watching for?

    2021's employment numbers are a mixed sign for overall recovery. While total employment has climbed, 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, while youth in particular saw significant losses from the third wave. The current trajectory of overall recovery is promising, but this third wave of COVID cases is particularly difficult for young employees who were already struggling to recover. We are keeping a close eye on these specific age groups and their differences from the larger picture.

  • 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, are more likely to work part-time jobs than men, are 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 and May 2020 (the deepest month of layoffs), male employment dropped by 9,500 workers while female employment dropped by 13,700 workers. By March 2021, employment had recovered for both groups, up 2.0% for males and 3.4% for females above their pre-pandemic levels. However, job losses in April and May have been particularly bad for women, with female employment dropping 3,300 in the past two months.

    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 and 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?

    Accommodation and food services as well as wholesale and retail trade experienced the heaviest losses. By May 2020, these industries had lost 7,600 and 7,300 employees, respectively. Employment in wholesale and retail trade improved throughout the summer, but has struggled to recover since an initial peak in August. The sector also saw a steep decline in May 2021, dropping by an additional 2,000 positions. Accommodation and food service had been slower to recover initially and experienced a sharp decline in employment after the increases in COVID cases in November 2020 and April 2021. 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. Overall employment in May 2021 is 0.8% above its January 2020 level.

    What are we watching for?

    Halifax is recovering with employment in many industries above their pre-COVID levels, but this must be observed with caution. Despite early vaccine distribution, the recent uptick in COVID cases has caused severe disruptions in some industries. May data show the effects of a third wave of COVID cases and its economic effects. As we experienced during the first and second waves, certain industries - such as retail or accommodation - have borne a disproportionate share of the losses. 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 jumped across the board from February 2021 to March 2021. Aggregate retail sales were up 25% and every category reported a double-digit increase, led by furniture and home furnishings at 47%, motor vehicles at 40%, and building and garden supplies at 39%. It must be noted, however, that this sort of February to March increase fits the typical seasonal pattern. Looking back at a decade’s worth of data shows that in almost every year the movement from February to March is the largest monthly increase within that year and that this increase averages 19%. Looking at March 2021 over March 2020 shows massive increases across most categories, but this is unsurprising as half of March 2020 was spent in tight lockdown. Nonetheless, the slightly-better-than-normal March results are a sign of strong recovery to that point.

    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 find ourselves in a third wave of COVID cases. Since comparisons to March 2020 are of limited use, comparing March 2021 to March 2019 provides some insights. The only category that is down over that two-year period is clothing (-17%), consistent with several months of high unemployment and the move for many to working from home: people simply have not needed to update their wardrobes for work, or, for that matter, for going out to events and restaurant meals. (If available, data on pyjama sales might tell a different story.) Gasoline sales also show only a very slight increase (4%) as commuting and travel have been halted. This small increase also could be more a function of gasoline prices than of volumes sold. The biggest increase at 72% is sales of building and gardening supplies and here both prices effects (e.g., skyrocketing lumber costs) and volume effects (e.g., lockdown-inspired renovation projects) are at play.

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 through 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 $21,177 per consumer in Q1 2021. This is down from an average debt of $23,610 over the course of 2019. Delinquency rates dropped precipitously in the middle of last year, falling by nearly a third to 1.08% in Q3 2020. While the rate has since risen to 1.21% in Q1 2021, it remains well below the long-term average. This means that fewer consumers are being overwhelmed by debt. With debt and delinquency remaining low 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 through 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; their short-term costs fit within their long-term ability to pay. Insolvencies occur when the amount of debt they have taken on is overwhelming. Therefore, consumer insolvencies 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.

    How is Halifax doing?

    Consumer insolvencies in Halifax remained low throughout 2020 and into 2021. There were only 302 bankruptcies and insolvency proposals in Q1 2021, well below the average of 508 insolvencies per quarter between 2015 and 2019. 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 we might expect from an economic downturn. 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. We expect that insolvencies will inevitably rise and return to normal, but it is unclear when and how quickly this will happen. When insolvencies eventually rise, it will be important to see whether they trend towards normal or whether they overshoot historic norms, as this may be a sign of economic damages caused by the pandemic.

  • 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 5 bankruptcies in Q1 2021, 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.

    The low number of insolvencies throughout the pandemic has been a sign of good economic health. This provides insight into how severely the COVID crisis has affected businesses and whether businesses have been able to access the credit and liquidity support they need to stay in business. Similar to consumer insolvencies, business insolvencies will have to rise eventually. We are continuing to watch these metrics to see if they slowly rise towards a more typical level, or if there are unforeseen economic damages that cause them to overshoot historic norms.

×

Search

This website uses cookies
This website uses cookies to improve user experience and analyse website traffic. By using our website without adjusting your cookie settings you consent to all cookies in accordance with our Privacy Policy.

Ok