Here we are in 2023. While very real health issues remain in play, the direct economic impacts of COVID-19 seem finally to be behind us as most of the world, like Halifax, is essentially open for business once again. Longer-term effects on the nature of work, commuting, and travel continue to unfold. No one knows yet if the pandemic marked an inflection point towards a “new normal” or whether we are simply in the slow process of getting back to our 2019 ways and customs.
After the 2020 crash and then the rebound that began in 2021 and carried over into 2022, economic growth in Halifax is expected to return to more normal pre-pandemic levels. A number of strong underlying fundamentals provide reason for long-term optimism: continued expansion of work at the Halifax Shipyard; robust residential construction activity; growth of firms and employment in our finance, life science, clean tech, and information technology sectors; and a steady pipeline of talented graduates from our post-secondary institutions. However, elevated levels of inflation, rising interest rates, labour shortages, and international tensions also generate risk and uncertainty over the shorter run.
With constraints on travel now fully removed, we also should see international migration return to its pre-pandemic trajectory. An interesting question is whether the recent bump in migration to Halifax from other Canadian provinces was a one-time anomaly, or instead is the beginning of a new trend. Evidence over the past year from provincial-level population figures suggests that the next set of population estimates for Halifax will show growth well above anything that we have ever seen before.
This population growth is welcome. It is what we need to ensure that we have the labour force and the tax base we need as a growing share of our population moves into its senior years. Whereas most long-term population projection scenarios issued by Statistics Canada even just a few years ago predicted a shrinking population for Nova Scotia in only a few years’ time, new forecasts issued recently show that we have “bent the curve” towards steady growth.
However, as we have seen, with growth can come growing pains, most visibly in terms of tight rental markets and sharply rising housing costs. This remains our biggest problem to solve, both to assist those whose housing needs are currently not being met and to ensure we do not stifle the very growth we desire by gaining a reputation as a place where people cannot afford to live.
John Maynard Keynes did not mean it literally when he wrote of how economies are driven by animal spirits, but it is interesting how the year of the rat in 2020 actually brought a global plague, how its effects stubbornly stayed with us through the year of the ox in 2021, and how we re-emerged with the energy of a tiger in 2022.
With the lunar new year close at hand, the year of the rabbit – an animal synonymous with good luck – is in sight. Here’s to getting back on track to normalcy, growth, and prosperity in 2023 – quick like a bunny!
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