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Canada’s Jobs Market Shows Signs of Strength in September as Prospects Remain Uncertain

By Brittney Windatt and Strac Ivanov

The month of September saw an employment increase of 61,000, following two months of little change, according to the September Labour Market Survey recently released by Statistics Canada.   This increase caused the unemployment rate to shift down 0.2 percentage points to 7.1 percent, representing the lowest rate since December 2008.   From September 2010 to September 2011, employment has grown by 1.7 percent, primarily in Ontario and Alberta.   Hiring demand in Ontario’s York Region also reached its highest level in August since 2008, and remained at a healthy level in September.

From September 2010 to September 2011, full-time employment rose while part-time employment declined by 2.5 percent and 1.5 percent, respectively.   Notable employment increases for September were found in British Columbia, Saskatchewan, New Brunswick and Prince Edward Island.   Gains in employment were seen among a variety of industries including educational services; professional, scientific and technical services; accommodation and food services; natural resources; and public administration.   However, these gains were partly offset by declines in finance, insurance, real estate and leasing; manufacturing; and information, culture and recreation.

Employment in both the public and private sectors rose 1.1 percent and 2.2 percent, respectively, while self-employment only rose slightly by 0.6 percent. This is generally seen as a good sign, because in hard economic times, people who cannot find employment are more likely to pursue self-employment – but such opportunities rarely involve healthy income and tend to disappear when the economy improves and employment opportunities increase.

Employment in educational services rose by 38,000 in September (effects of seasonal variations have been removed), with an annual increase of 1.7 percent.   The number of workers in professional, scientific and technical services rose by 36,000 in September, continuing an upward trend that began in the summer of 2009.   Employment in this industry as increased by 4.1 percent in the past 12 months, representing one of the highest rates of growth among all industries.

In accommodation and food services, employment was up 31,000, an increase of 7.6 percent compared to September 2011.   This increase is the highest growth rate among all industries.   Following two consecutive months of decline, employment in natural resources increased by 17,000 in September – bringing employment to the same level it was at in September 2010.   Also bringing employment back to the level it was at in September 2010 was the 14,000 employment increase in public administration.

Finance, insurance, real estate and leasing saw an employment decrease of 35,000, a 1.4 percent decline from September 2010.   Following little change in the previous three months, employment in manufacturing was down 24,000 in September.   This decline leaves employment slightly above its level from September 2010.   There were also declines in information, culture and recreation.   Despite September’s decline however, employment in this industry has increased by 1.5 percent compared to September 2010.

British Columbia saw large gains in employment, causing the unemployment rate to fall to 6.7 percent. Employment rose by 32,000, all in full-time work – this was the first notable employment gain since July 2010.

Employment in Ontario was little changes for the second consecutive month, with the unemployment rate sitting at 7.6 percent.   However, over the past 12 months, employment in Ontario increased 2.0 percent – representing an above-national growth rate of 1.7 percent.

Employment increased among workers aged 25 to 54 in September, bringing growth over the previous year to 1.2 percent.   For those aged 55 and over employment grew by 21,000, bringing employment for this age group up 2.7 percent since September 2010.   Employment among the youth aged 15 to 24 was slightly higher, bringing growth since September 2010 to 2.8 percent.

Hiring demand statistics that Vicinity Jobs gathers for the region of York, Ontario, indicate that in September, hiring demand levels were about 3% higher than in September 2010. But it is important to note that September 2010 represented the peak hiring demand in 2010. From January till September 2011, hiring demand has been at healthy 17% higher than in the same period of 2010, with the increase being spread across various industries.

This is a refreshing dose of good news at a time when the economic prospects remain uncertain. Unfortunately, at this point, the direction of the domestic job market will likely be driven primarily by events outside of Canada. The two largest risks facing Canada’s economy remain the debt crisis in Europe and the fact that the US economy is still in intensive care two years after the mortgage market meltdown in 2008. At home, the largest (and mutually linked) risks at this point remain the record high debt levels of average Canadian households (fuelled by record low interest rates that have nowhere to go but up), and the unsustainably high real estate prices. The combination of these factors leaves Canada exposed to a smaller version of the US debt crisis that started the 2008-2009 recession.