Alberta’s unemployment rate jumped 0.6 percentage points to 7.5 per cent in March, its highest level since 1996.
Contributing to the increase were 9,700 people entering the workforce and the loss of 3,400 jobs.
The magnitude of the jump was surprising but not a worry to ATB Financial economist Todd Hirsch. He’s more concerned that Alberta has yet to add jobs since reaching the depths of the recession last summer.
“It’s telling me that Alberta’s economy is continuing to lag behind the rest of the Canadian economy,” Hirsch said.
“In terms of the total number of jobs, we’re the only province that’s still below July of last year, which was the low water mark … the darkest day of the recession.”
Even though Alberta’s economy is showing signs of improving, through strong prices for commodities and housing, employers aren’t yet confident enough to start hiring, he said.
“I think Alberta employers are still waiting to see a couple more months of strong growth until they’re convinced that they can justify hiring people again,” Hirsch said.
Employment statistics usually lag economic activity by four to six months, Hirsch said. He expects Alberta’s unemployment rate to start improving by summer time.
Alberta’s unemployment rate remains the third lowest rate in the country, behind Saskatchewan’s 5.1 per cent and Manitoba’s 5.2 per cent. The national average was 8.2 per cent, unchanged from February.
Edmonton’s unemployment rate was 7.3 per cent in March, up from 6.8 per cent the month before. A year ago, Edmonton’s unemployment rate sat at 4.8 per cent while Alberta’s rate was 6.1 per cent.
Last month, employment in the services sector decreased by 12,100 people in March while increases occurred in the category of forestry, fishing, mining, oil and gas.
Mike Percy, economics professor and dean of the University of Alberta School of Business, thinks it will take another quarter for Alberta’s unemployment figures to start their retreat.
He noted that vehicle sales and retail activity is still flat in the province, suggesting Alberta’s economic recovery has been focused mainly on a few sectors and hasn’t yet generated more retail and wholesale activity.
“I don’t think it reflects fundamental weakness,” Percy said.
With a number of large capital projects waiting in the wings to begin construction, Percy expects that within two years Alberta will see a return to the super-heated times of 2007, when there was so much building going on that labour was scarce.
“We’re going to go from famine to feast,” he said.
