Despite the oil price crash and the sluggish growth of Canada’s manufacturing and export industries, the cities of Calgary and Toronto have recorded a surprise growth in job numbers over the past year.
According to data released by Statistics Canada last week, Canada recorded a disappointing overall loss of 6,400 jobs, with the unemployment rate remaining steady at 6.8 per cent. But there was a note of positivity from Alberta, which registered the strongest job growth in the country despite being expected to reel under the impact of the recent oil price crash. Although the province registered a loss of 5,000 jobs in June, it still added 22,800 jobs since last June, up by one per cent.
Calgary alone has added about 30,000 more jobs since last June, which is an increase of 3.8 per cent.
“Most of Alberta’s job losses to date have been in the oil patch, so Calgary has been somewhat insulated so far,” explains economist Robert Kavcic. “There were also probably many businesses that had a hard time finding labor in recent years, and are now taking the opportunity to absorb some of those who have lost jobs.”
Toronto has also experienced a similar trend, despite Ontario’s dependence on exports and manufacturing. The city added 95,000 jobs so far this year, making for an impressive annual growth rate of six per cent.
Experts believe that the growth in the job market in Toronto is being driven by the booming housing market. Real estate sales reached an all-time high over the past year, with the average price of a detached house in Toronto increasing by 14.2 per cent to reach an average of over $1 million.
The StatsCan report also supports this theory, showing how most job gains in Ontario (about 14,000) were in the construction industry, as manufacturing lost 5,200 jobs.
However, some skeptics believe that these numbers are unrealistic and may paint a misleading picture about Canada’s job market. Economist Will Dunning feels that the growth in Toronto “looks unrealistic”, especially the figures in May which show a jump of 53,000 jobs in one month. “That in turn contributed to an unbelievably high number for all of Canada for the same month,” he says.
According to Dunning, while Greater Toronto houses one-sixth of Canada’s population, it accounts for only three per cent of the sample used by StatsCan to measure unemployment, and the same holds true for Vancouver and Montreal.
Economists feel that the real impact of the economic slowdown will be felt in the months ahead. “Overall, the recent pace of employment gains is one sign that the economy isn’t completely tanking in response to the oil price shock. But with forward-looking indicators pointing to continued weakness in GDP, it may only be a matter of time before the pace of jobs growth slows to a trickle,” says David Madani of Capital Economics.
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In November 2014 he U.S. economy added 321,000 jobs, exceeding forecasts and putting the country on track for the most successful year for job creation since before 2000.
Unfortunately this level of employment growth is still not realistically attainable for Canadians. Despite previous job gains, November brought more losses for the economy. Employment in Canada fell 10,700 from October, while unemployment increased to 6.6 per cent. Given how much of a see-saw the labour market has been on over the last year this is not too surprising. However economists believe the outlook for Canadian jobs is improving.
Three important factors are involved in judging the state of the job market: employment levels, hours worked and average hourly wages. Taken together, the combined annual growth rate of these three factors shows an economy suffering from a combined growth rate of 2.4 per cent. At this level the index is well below its 15-year average of 5.7 per cent and employment growth remains at nearly the weakest level it’s been in a non-recession year.