Employers may struggle as P.E.I. unemployment rate falls steadily

After a volatile couple of years, the P.E.I. job market appears to be settling into a more steady trend.

Statistics Canada released the labour force survey for May on Friday morning.

The pandemic played havoc with the Island's labour economy. The unemployment rate soared in the early months of the pandemic, peaking at more than 14 per cent in June 2020. It began to fall that summer, dropping to under 10 per cent by January.

But the pandemic was not done with job seekers yet. 2021 was a volatile year, with the rate jumping over 10 per cent again in the spring and once more for the last months of summer.

Since jumping back close to that double-digit mark in January, the unemployment rate has been falling steadily. It was 7.8 per cent in May, which is coincidentally where it was to start 2020.

While the declining unemployment rate is good news for people looking for work, UPEI economist Jim Sentance said conditions could grow increasingly difficult for employers.

"This is the tightest labour market ever, and it is probably set to get tighter, even with the continued highest rate of population growth in the country," said Sentance.

UPEI economist George Jia noted the number of job vacancies was high in the last quarter of 2021, with about a third of them being long-term, that is, vacant for 120 days or longer.

"There is some sign that the wage rate offered is increasing but at a rate not close to inflation," said Jia.

Entries into workforce solidifying

The unemployment rate is the story of two different numbers: the number of jobs in the province, and the number of people who want to work, with the difference between the two making up the unemployment rate.

When you look at these two numbers, it is the workforce that has been more volatile.

Job growth has been fairly steady since the pandemic struck in March of 2020. The labour force, in the meantime, has been more unsteady. This was especially true in 2021, when Islanders occasionally surged into the workforce, and then retreated, perhaps because they were getting ahead of the availability of jobs in the economy.

Job growth has been especially strong in the last 12 months. In May of last year the province logged 78,800 jobs. By last month that had risen to 85,600, which is an all-time record high.