Written by Strac Ivanov
June 11, 2012: According to Statistics Canada’s labour market survey, released on Friday, June 8th, Canada’s job market seems to be weathering the global economic uncertainties quite well – at least for the time being. A separate report tracking hiring demand that we (VicinityJobs.com) release each month also points to signs of strength in the job market.
Statistics Canada reports that unemployment remained unchanged in May, at 7.3%. But the economy actually added some 7,700 jobs. This is remarkable, given that there was no shortage of bad economic news in May: Major stock indices dropped 7% on average, the economic crisis in the Euro zone worsened, the major developing economies (China, India, and Brazil) reported disappointing economic performance, and the signs of an economic recovery in the US economy seem to be disappearing fast.
To be fair, Canada’s job market is growing at a pace much slower than one would expect after the weak performance recorded in the years since 2008. The number of jobs created (7,700) is hardly impressive given that it translates to only a 0.04% growth. Year-over-year the job market performance is not very inspiring either: Employment has only risen by 1.2% over the past 12 months. So this is by no means an “accelleration” in the job market growth.
But given the grim global economic reality, even the fact that the job market situation did not worsen in May is remarkable. More remarkable yet were the details in Statistics Canada’s report. Employment for the month increased in manufacturing, educational services, retail and wholesale trade, and agriculture. Canada’s Manufacturers have been creating jobs for over 6 months now, since November 2011.
On the opposite end of the spectrum, the construction industry and the information, culture and recreation industry shed some 57,000 jobs in May.
The number of both employees and self-employed held steady (whereas when the economy worsens, the number of self-employed typically tends to increase). And over the past 12 months, the employment market growth occurred largely in the private sector. This is good news as well, because it means that employment growth has not been artificially generated through unsustainable new government spending.
Geographically, the growth was concentrated in oil-rich Alberta and in New Brunswick. Employment in Ontario and British Columbia did not change much. In British Columbia, the unemployment rate increased significantly by 1.2 percentage points as more people started looking for work – but employment growth in the province over the past 12 months has been quite solid. Unemployment in Ontario remained unchanged.
A separate report on hiring demand issued by VicinityJobs.com , which tracks hiring demand from employers in Ontario’s York Region, also points to signs of strength. Hiring demand was flat in May compared to April, and weaker than the peaks reached in January and March. But it is much better than it was this time last year, and was particularly strong in industries known to create good-quality well paying jobs: Manufacturing and Professional and Technical Services. In contrast, a year go, in May 2011, we were seeing a significant decline from the levels reached in the earlier months of the year. In terms of occupational categories, Hiring demand was strongest for Management positions, followed by engineering jobs, and Administrative jobs. Together, these 3 categories accounted for more than one out of every 3 jobs advertised.
Will Canada’s job market remain strong? It depends on a number of factors. The uncertainty remains. If the global economic situation does not improve, it is all but guaranteed to impact Canada’s economy as well – and, by extension, the job market. More think-tanks and financial institutions are warning about the high level of consumer debt and a possible collapse in the Canadian real estate market. If it happens, it will have a significant impact on the domestic demand for goods and services in Canada. (This happened in the US when the real estate bubble burst there a few years back)
But for the time being, Canada’s economy is showing remarkable resilience. As a result, the market for jobs in Canada is stronger than the job markets of most other developed economies.
The full Statistics Canada Labour Market report can be downloaded at the following link: