Housing slump and falling oil prices impact labour market

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After more than a decade of strong yearly growth, housing starts in Nova Scotia and across Canada reversed trend and declined in 2013. The slump continued in 2014 and is projected to continue throughout 2015. The swift drop in world oil prices has led to reduced drilling and exploration in the Canadian oil sands and a softening of the Alberta economy, resulting in lower hiring rates and lay-offs in that region and, in some cases, a reverse migration of workers back to the east coast.

What are the short-term and long-term implications for us?
The combined effect of reduced housing starts and lower oil prices has been an increase in the available supply of workers to support the residential construction sector, essentially reversing the labour market conditions that existed in 2012.

Where two years ago a homebuilder couldn’t find new crew and feared losing those they did have to the West, that same homebuilder is now challenged to keep their existing workers employed and is at risk of losing them due to lack of work.

While this current rebalancing of the labour market has made it easier to meet the residential construction sectors immediate labour force needs, we will still face critical labour market shortages in the medium and long term. A large proportion of our workforce is aging to retirement, and historically low numbers of young people are entering residential construction trades. The existing workers who are lost to other industries in the current downturn are, unfortunately, unlikely to return.

Finding and keeping a productive and skilled workforce has always been a significant management challenge for home builders and renovators, and will continue to be a challenge well into the future, no matter what factors are influencing the labour market in the short and near term.