Oilpatch to lose 185,000 jobs? Probably not, says economist
Layoffs blamed on falling oil prices and decreased spending by energy industry
A report says the Canadian economy could lose as many as 185,000 direct and indirect jobs related to the oil and gas industry in 2015, with most of the job losses being in Alberta.
"If oil prices continue to remain low, we anticipate additional reductions to spending and jobs before things start to turn around," said Carol Howes, the director of the Petroleum Labour Market Information (PetroLMI) division of Enform in a news release.
It did seem like an overly pessimistic view and maybe a bit of a simplistic estimate." - Todd Hirsch, ATB Financial
Enform is an arm of six lobby groups representing the oil and gas industry, including the Canadian Association of Petroleum Producers and the Canadian Energy Pipeline Association.
Enform predicts the biggest impact would be on oil and gas engineering construction firms, which do most of the work on development projects, accounting for up to 75,000 jobs.
Support services, such as drilling companies which are also involved in exploration, would represent another 26,000 jobs.
Enform is also predicting:
- $31-billion reduction in capital and operational expenditures in 2015.
- $28-billion reduction in exploration and development in 2015.
- 20,000 jobs lost in B.C., 14,000 in Ontario in 2015.
The outlook for 2016 is less certain, says Howes.
"What is clear is that the behaviour of oil and gas companies will be an important factor in determining actual job losses in 2015," she said.
Too pessimistic, says economist
Todd Hirsch, the chief economist with ATB Financial, says he finds the numbers to be too pessimistic.
"For years, that group was ringing the alarm bells about shortage of labour saying we have to do something dramatic to increase labour supply and skills training. And now this change in tone?"
Hirsch is expecting an adjustment in the labour market. Over the past several months, resource jobs are down, as are construction jobs.
"There's no question that the labour market has weakened in the last year," said Hirsch. "But we were going into this with almost an overheated labour market, and some correction probably to take some of the froth off the market isn't such a bad thing."
Alberta added 53,000 jobs in the past year, in areas outside of the oilpatch.