Despite all the talk about layoffs in the oil patch due to slumping oil prices, both Alberta and the Calgary area saw increases in jobs in April.
According to Statistics Canada, overall hiring is at a three-month high. However, this is not surprising given the collapse in oil prices, the province’s natural resources sector which lost about 3,500 positions in April.
Statistics Canada reported that Alberta employment was up by 12,500, or 0.5 per cent, from March. The gains came from part-time employment, which was up 20,100 month-over-month. Employment was up by 53,300 jobs, or 2.4 per cent, from a year ago. The province’s unemployment rate remained the same at 5.5 per cent.
In the Calgary area, employment was up by 0.8 per cent, or 6,300 jobs, from the previous month and by 4.6 per cent, or 36,600 positions, from a year ago. Calgary’s unemployment rate rose slightly to 5.3 per cent from 5.2 per cent in March.
Across Canada, the federal agency said employment was down 0.1 per cent with a loss of 19,700 jobs. However, year-over-year it was up by 0.8 per cent, or 139,100 positions.
Canada’s job market is expected to see a flat growth rate, with oil companies shedding jobs as other sectors create new ones. The layoffs in the oil sector are going to significantly impact the unemployment rate in the province, say experts.
The Canadian economy has been nearing recession in Alberta due to collapsing prices of oil, pushing the employers into uncertainty about future job hires. As a result, self-employment and part-time jobs are on the rise, as people hold on to alternatives while waiting for full-time employment.
Economists at the Conference Board of Canada have said that job seekers might have to wait until 2016 for “solid employment opportunities”.
“This is only the beginning. As energy producers cut back on investment this year, there will be ripple effects throughout the entire economy, eventually hitting the construction sector and other services that depend heavily on the oil and gas sector for business,” said David Madani of Capital Economics.
The Conference Board also believes that hiring will be overtaken by layoffs in the coming months, and the unemployment rate may increase to 6.9% by mid-year.
However, Bank of Canada policymakers are optimistic that a depreciated dollar could provide some reprieve through increasing employment in Ontario and Central Canada, where the lower currency is expected to benefit exports. But this hasn’t convinced industry experts, who believe that Ontario will not be able to bounce back to industrial success by end of this year.
According to Rafael Gomez, economist at the University of Toronto, the job market can improve only if there is sufficient economic growth. “If you have a high-growth economy, we’re talking growth of not a meagre one percent or even two, but like four, then you might generate enough firms that are new and growing and would be hiring,” says Gomez. “That’s the only way we’re going to see a turnaround in employment numbers in that sector; is if growth basically tripled from its current rates. And it’s not going to.”
The Canadian economy is expected to grow at a rate of 1.9% this year, according to the Conference Board. “We’ve seen no pickup in investment yet. There hasn’t been any sign that it’s taking hold. Unless [Central Canada] starts attracting more investment, we’re not going to see a big pick up in the number of jobs,” says Matthew Stewart, Conference Board economist.
Another concern for the job market is the steadily declining rate of business profits, which is shown to have an adverse effect on employment levels. The commodity price index of the Bank of Canada has declined by an alarming 36% in the past few months, and this has caused a lot of worry among businesses whose profits have a strong correlation with the index.
Many energy and non-energy firms have been reporting a decline in profits, and even losses. Insurance firm Manulife has reported a 50% decline in earnings last week. “Unless oil prices rebound more substantially soon, that could reduce profits by as much as 30 per cent. On that basis, investment would decline sharply,” says Madani.
Madani believes that if investment declined by 10%, it will put the economy into recession. However, he is hopeful that certain positive factors might reduce this risk. “The improving US economy and lower Canadian dollar should aid exporters, supporting investment in certain sectors other than energy.”
While exports may be expected to benefit with the lower dollar, which may also improve Ontario’s declining share of investment, this will not help create more jobs. All it does is fund technological advancements, especially in the auto industry. “Every year we’ve been subsidizing the big auto manufacturers, they’ve been shedding jobs every year whether they’ve been making profits or not,” says Gomez.
The trouble in the job market is also going to affect Ottawa’s decision on whether or not to invest in public infrastructure, which has been neglected for several years. Finance Minister Joe Oliver had been urged to invest billions of dollars into public works in order to up the employment rate, but has been reluctant to do so for fear of losing federal surpluses beyond a point. “This is precisely the wrong time to launch a massive deficit program that would undermine investor confidence, erode our credit standing, weaken our ability to withstand further international shocks, add to our debt burden, reduce our ability to support social programs and burden our children with our expenditures,” the minister said.
According to Statistics Canada, the Canadian economy shed 11,300 net jobs in December instead of the 4,300 decline reported earlier in January. The updated jobs figures were part of the agency’s annual revisions to labor data.
Canada lost almost three times as many jobs in December as originally estimated, and job creation for the full year also fell short, suggesting Canada’s labor market is on a weaker footing than previously believed. December’s jobless rate was 6.7%, compared with the previously estimated 6.6%. Adjusted to U.S. concepts, the jobless rate was 5.7% last month, compared with 5.6% south of the border, Statistics Canada said.
Net job creation in Canada for 2014 totaled 121,300 positions, the lowest level since the country posted a net loss in jobs in 2009, at the height of the global recession. The tally for 2014 was roughly a third less than previously estimated.
Douglas Porter, chief economist of BMO Capital Markets, called some of the revisions fairly significant saying, “The overall impression is that the labor market was even more sluggish than what we were first led to believe. It definitely puts a more cautious hue on how the labor market is faring.”
Job gains in 2014 were driven by increases in full-time positions. Overall employment grew 0.7%, the same pace as the previous year, but less than half the 1.8% rate in 2012. The number of people who are actively looking for work as a share of the population dropped to 65.7% in December, the lowest since 2000. According to Statistics Canada this was likely because of the country’s aging population.
The agency revises employment figures once a year, usually in January. The latest revisions were more comprehensive, going back to 2001, because they incorporate data from the latest national census conducted in 2011.
Collapsing oil prices are expected to affect oil-rich Alberta particularly hard, which last year recorded the fastest employment growth rate of all the provinces, and the second-lowest jobless rate after Saskatchewan.
So how will Canada fare with employment, oil prices and housing in 2015? Top economists share their views for the year ahead.
Doug Porter, chief economist at BMO Capital Markets believes that 2015 will see only a little improvement in the job market. “Through much of 2013 and 2014 the jobless rate was seemingly locked at about seven per cent. It’s become unstuck in recent months. We see it in the low six per cent range,” says Porter. According to Porter, the rate of unemployment drifts downwards in a growing economy, whereas it shoots up drastically when economic growth slows down. And as BMO Capital Markets foresee the Canadian economy doing better in the coming year, it is therefore predicted to bring down the unemployment rates as well.
The chief economist at Gluskin Sheff and Associates, David Rosenberg, also has a positive prediction for 2015, forecasting the unemployment rate to drop from 6.5% to 6% by the end of next year mainly due to Canadian exports seeing a boost due to a slowdown in China’s economy. “With the lagged impact of the Canadian dollar’s depreciation, the fiscal stimulus at the federal level and the US economy in acceleration mode, goods-producing employment will be a big source of support,” says Rosenberg,
Dawn Desjardins, assistant chief economist at Royal Bank of Canada, believes the unemployment rate in 2015 will lower only slightly from its current 6.5%. “We expect it will hold at or slightly below this level, historically considered to be the economy’s full employment rate.” says Desjardins.
Striking a positive note, Porter believes the US will lead the way to a global economic recovery in 2015, and that this won’t be hampered by high oil prices, which he believes will see only a moderate increase. “I don’t think we will be back at the triple-digit mark, but it will be in the low to mid-$80s. So we will see some recovery—though, having said that, it could go lower in the meantime.” Rosenberg largely shares this view, putting the price rise down to higher international demand and production cuts from both OPEC and non-OPEC suppliers all over the world. “There is a significant portion of global oil production that is not economic or “fiscally viable” below $80 per barrel and this will result in production cutbacks after oil remains below $80 for a couple of quarters,” says Rosenberg.
Desjardins also predicts only a mild increase in oil price in 2015. “We expect oil prices (WTI) will be around $75 at the end of 2015, supported by a gradual recovery in global demand and the likely paring back of supply,” says she.
On the question of housing prices, Porter feels that it is tough to speculate on Canada’s real estate market, but believes that prices will increase in 2015. “They won’t rise as quickly as in 2014; we’ll see a bit of cooling off next year. But economists, pundits and media have been spectacularly wrong on the housing market. As long as borrowing costs remain so exceptionally low, and employment growth keeps churning ahead, it would be tough to see a serious near-term correction. That’s not to say the market will never feel some pain, but the near-term outlook appears reasonable at this point,” he says.
Desjardins also predicts higher house prices by the end of 2015, but thinks that the rate of increase will be lowest since 2009. “Affordability in most markets shows modest signs of stress. The outliers are Toronto, Vancouver and to a lesser extent Calgary. Low interest rates and modest increases in income have offset the impact of rising prices in most cities. In 2015, expected increases in mortgage rates will challenge affordability. That said, with the Bank of Canada likely to only slowly raise the policy rate, and income growth expected to accelerate, we are looking for a cooling in housing sales, not a collapse,” she elaborates.
Rosenberg however feels that house prices will remain flat all over Canada. He predicts low mortgage rates for next year due to the good amount of housing availability in terms of supply and demand. “But home prices relative to apartments are too far into the stratosphere, and residential real estate values, benchmarked against virtually any economic metric, are far too high relative to historical norms to believe there can be much upside to prices,” says Rosenberg.
With the new ‘express entry’ skilled immigration system that Canada is set to launch from January 2015, applicants from India who have the right educational qualifications, skills and work experience may have to wait only months rather than years to move to Canada. For those in senior management positions, with experience in various fields and international exposure, immigration to Canada will very likely become a faster process, considering that it will be linked to the employment needs of the country.
This new immigration programme is moving away from “passive processing to active recruitment”. Canada’s immigration and citizenship minister Chris Alexander recently explained at conference in Regina, Canada, that rather than the present first-come, first-served basis, express entry was focused on the job market in Canada.
But from next year, as in the Australia and New Zealand skilled immigration categories where applicants are invited to apply based on certain selection criteria, express entry will also follow the ‘expression of interest’ model. Earlier, during a visit to Delhi, Alexander had described the new system as a game changer that would help some of the skilled successful applicants in the economic and business immigrant categories to get their papers processed in as little time as six months.
Under the express entry system, applicants will be able to submit an ‘expression of interest’ to the Canadian government; their resume and details will be entered into a database. Employers seeking foreign skilled workers will have access to such information on the database, allowing them to select suitable candidates. If a Canadian employer cannot find Canadians to do the job after a labour market impact assessment, they can go online to the Citizenship & Immigration Canada (CIC) database of applicants and look for the likes of welders, project managers etc. in India or anywhere in the world and make a job offer. Those with job offers will get priority when it comes to invitation to apply for permanent residence in Canada. The express entry system will cover all of Canada’s existing skilled immigration programmes including skilled worker programme, skilled trades programme and the Canadian experience class.
A recent study released by the CIC showed that new immigrants were apprehensive about the new system. The respondents in the study, conducted by research company Ipsos Reid, felt that the government should first ensure that those skilled immigrants already in Canada without jobs be given support in finding suitable employment. Immigration experts, meanwhile, are waiting for more details on the system once it is rolled out.
In India, the interest among skilled Indians in moving to Canada is very high with over 33,000 immigrating in 2013. Of the total number, 55% were in the economic and business categories and the rest in the family reunification category.
Source: Economic Times
The latest employment figures from Statistics Canada show a decline of by 112,000 jobs in the private sector in August, resulting in an overall drop in employment of 11,000.
Only last month the agency botched the July jobs report, erroneously claiming the economy added just 200 new jobs, when it fact the figure was 42,000. Scotiabank economist Derek Holt was quick to warn the report “looks very fishy to me.”
We’ll know soon enough if another mistake has been made, but even if the employment report for August didn’t fit with what economists were expecting, it’s hardly out of line with what the Canadian economy has experienced in recent months. There have not been two consecutive months of net new job growth since October 2013 and these new jobs figures are just part of a slowing trend that’s been underway since January 2013.
On an annual basis, job growth is probing depths not seen outside of a recession since the federal government took its deficit-fighting axe to the public service in the mid-1990s, or since the 2001 U.S. recession and 9/11 brought economic activity nearly to a halt.
A few other highlights from August:
- The unemployment rate stayed at seven per cent.
- Since September 2013, full-time employment has grown just 0.03 per cent, the equivalent of 4,200 net new positions.
- Despite the decline in the number of jobs, wages posted a 2.5 per cent gain from the year before. So it’s not all bad news.
Attorney Colin Singer Commentary:
The economy continues to show evidence of inconsistency in job creation. Despite the stubbornly high country wide unemployment rate, shortages continue to amplify in certain industries such as skilled trades in Western Canada.
According to one of Canada’s largest banks, the rise in part-time employment is nothing more than a pullback after companies hired more full-time workers than needed coming out of the recession. Economists Randall Bartlett and Derek Burleton wrote in a research note that there’s no reason to be concerned about the recent trend.
According to the latest official jobs data from Statistics Canada, the economy produced over 60,000 new part-time jobs in July, even as full-time employment decreased. Since the start of the year, more than 60 per cent of the 95,000 jobs created have been part-time work as opposed to full-time.
Some analysts are starting to worry about the long-term impacts of this trend since part-time work is generally associated with lower wages, less generous benefits and a much more temporary work force.
Typically in recessions, employers favour part-time workers over full-time positions, as companies like to keep their work force leaner to deal with impending uncertainty. When recessions end, companies tend to hire a lot of full-time workers as they expand and feel optimistic about their prospects in a growing economy.
There may be disproportionately more part-time jobs being created at the moment, but in the overall economy, full-time work still makes up 80 per cent of all jobs, the economists note. There are also numerous demographic reasons for the slight shift toward part-time work, and they, too, are nothing to worry about, according to TD’s economists.
Official data suggests about 70 per cent of part-time workers are female. Many more Canadian women are now in the work force than there have been historically, and as that trend continues “the part-time share of total employment could continue to head higher over the longer run as a result.”
Canada’s aging population is also playing a role. About eight per cent of part-time workers in Canada today are at least 65 years old. That ratio has doubled over the last 10 years, a time when the seniors’ share of the population as a whole has only increased from 16 to 18 per cent.
It’s a well-reported trend that Canadians are working later in life than they used to. But by and large, most of them are choosing part-time work when they do, which is skewing the overall ratio higher.
According to the economists, ‘Notwithstanding some of the structural trends at play that could lead to a gradual increase in the part-time share over the longer haul, we expect to see both stronger job gains and a more equitable distribution between full-time and part-time positions in the coming months.’
Source: CBC News
Revised data released by Statistics Canada shows that Canada’s economy created a net of 41,700 jobs in July, far more than expectations of market analysts.
Below are reactions from Canada’s Bay Street:
Paul Ferley, Assistant Chief Economist at Royal Bank of Canada:
“A totally different story here … with the revision, suggesting a totally different picture in terms of the employment conditions in July, the very strong overall increase.”
“However year to date, the gains in employment are still fairly modest. Going forward hopefully we will see sustained increases, but at the moment certainly these revised July numbers, it’s showing a more encouraging picture, though we are not out of the woods yet.”
“Expectations were that that number was going to be a bit stronger, but this was above expectation, and with that I think it should provide a bit more of a lift for the (Canadian dollar).”
Sal Guatieri, Senior Economist at BMO Capital Markets:
“A pretty good number. A lot better than the market was anticipating. The loonie is up at least a quarter cent stronger.”
“The headline number’s double the initial consensus, expectations for the July employment gains … It was all in the private sector – 55,000 increase. The only fly in the ointment is the drop in full-time employment, but that’s a lot less than was initially reported.”
“Unemployment rate is down at 7%. So overall, this does suggest that Canada’s labor market is improving after hitting a soft patch in the first half of the year. That’s now reflecting stronger economic growth. We think GDP grew at a 3% rate in the second quarter, led by a resurgence in exports.”
“It likely indicates that the trend toward slower job growth has stopped and employment is now turning up, but again it’s just one report, so I don’t think the Bank of Canada will take a lot from the news. If we see consecutive gains in employment certainly along this order, that would change the tone at the Bank of Canada. But we would need a few more months of data to confirm that the labor market is strengthening.”
Camilla Sutton, Chief Currency Strategist at Scotiabank:
“It doesn’t change the fact that we’ve only had modest job gains in Canada this year … The quality of the jobs probably isn’t as strong as you’d like to see because they’re so heavily weighted towards part-time. However, job gains are good, and an unemployment rate that is falling with a stable participation rate is also encouraging.”
“You combine in manufacturing sales which was not only stronger than expected but the second upside surprise and last month’s was also revised slightly higher. So that too is fairly encouraging in terms of what’s transpired in the domestic economy.”
Attorney Colin Singer Commentary:
Recent developments seem to be dovetailing the rebounding US labour market. Canadian employers in the skilled trades are expressing increasing concerns about labour shortages. This is especially the case in Alberta, Saskatchewan and British Columbia. It favours those interested in applying for a Canada work permit or Canadian permanent residence (Alberta immigration, Saskatchewan immigration and British Columbia immigration programs).
Source: Financial Post
Released at 8:30 a.m. Eastern time in The Daily, Friday, August 15, 2014
In July, employment increased by 42,000 as a result of an increase in part-time work (+60,000). Unemployment rate declined by 0.1 percentage points to 7.0%.
In the 12 months to July, employment rose by 157,000 or 0.9%. Most of the growth was reported in part-time work. The total hours worked went up slightly (+0.3%) compared with July 2013.
Among age groups 15-24 and 25-54, employment increased in July, whereas it fell for people aged 55 and over.
Among provinces, Ontario, Labrador and Newfoundland saw an increase in employment, while Nova Scotia and Brunswick witnessed a decline.
In July, more people were employed in educational services and in information, culture and recreation. However, employment declined in construction, health care and social assistance.
Employment in the private sector increased in July. There was a decline in the number of self-employed.
The unemployment rate in Canada was 6.1% in July, after being adjusted to the concepts used in the US. In the US, the unemployment rate for July was 6.2%.
Gains among age groups 15-24 and 25-54
Among people aged 25-54, employment increased by 38,000 in July. Their unemployment rate declined by 0.1 percentage points to 6.0%. Employment for this age group has changed little when compared to 12 months earlier.
Among youth aged 15-24, employment increased by 34,000 in July. However, their unemployment changed little and stood at 13.1% as more youths participated in the labour market. Despite the increase in employment in July, the overall employment levels were little changed from 12 months before.
Among people aged 55 and above, employment fell by 30,000, partly offsetting the increase in June. Compared with 12 months before, employment increased by 151,000 (+4.5%). These gains were mainly due to a 3.2% growth in the population of this age group.
In Ontario, employment increased by 40,000 in July, offsetting the decline witnessed in the previous month. As more people participated in the labour market, the unemployment rate remained stable at 7.5%. Employment in Ontario was up by 60,000 (+0.9%) compared with July 2013.
After witnessing three consecutive months of decline, Newfoundland and Labrador saw an employment increase of 4,700 in July.
The unemployment rate did not see much change and stood at 12.4% as more people participated in the labour market. Despite the July increase, employment in the province came down by 5,000 (-2.2%) compared with 12 months before.
In Nova Scotia, employment reduced by 3,900. Thus unemployment rate rose up 0.7 percentage points to 9.4%.
Employment in the province was down 10,000 (-2.2%), on a year-over-year basis.
In New Brunswick, employment declined by 3,400 in July. The unemployment rate was little changed from a month back and stood at 10.0%, as fewer people participated in the labour market. Employment in the province was virtually unchanged, compared with a year earlier.
In Saskatchewan, there was little change in employment in July. But there was a decline in the number of people searching for work which brought down the unemployment rate by 0.7 percentage points to 3.2%, the lowest rate seen by the province since 1976 when comparable data became available. Employment in Saskatchewan was up 8,200 (+1.5%) compared with a year earlier.
In July, employment in educational services increased by 46,000. The increase was mainly in primary and secondary schools in Ontario.
There were 17,000 more people employed in information, culture and recreation in July. Employment in this industry has increased by 55,000 (+7.3%), compared with a recent low in July 2013.
The number of people employed in construction declined by 39,000 in July, offsetting an increase in the previous month. Compared with 12 months earlier, employment in this industry was down by 46,000 (-3.4%), the result of declines in the fall of 2013.
There was a decline of 26,000 in employment in the health care and social assistance services in July. Most of it was in the social assistance sector in Quebec. Employment in this industry was up by 90,000 (+4.2%), compared with a recent low in July 2013.
Employment in the private sector increased by 55,000 in July. Whereas the number of employees in public sector went up only slightly and the number of self-employed people declined by 37,000. Compared with 12 months earlier, the number of employees increased both in the private sector (+1.2% or +141,000) and the public sector (+1.9% or +69,000).
Over this 12-month period, self-employment was down 2.0% (-54,000).
Summer employment for students
From May to August, the Labour Force Survey collects labour market data about young people aged 15 to 24 who were attending school full time in March and who intend to return to school full time in the fall. The published data are not seasonally adjusted; therefore, comparisons can only be made on a year-over-year basis.
As a result of an increase in part-time work, employment among age group 2-24 increased by 32,000 compared with July 2013. The unemployment rate for this group changed little at 71.1%, since employment and the number of returning students was increasing at a similar pace. The unemployment rate for this group was 8.1%, little changed compared with a year earlier.
For students aged 17-19, the employment rate was 58.8% in July, little changed from 12 months earlier. Their unemployment rate was also little changed at 17.0%.
Employment was 29.1% among students aged 15-16, virtually unchanged compared with July 2013. Their unemployment rate was also little changed at 28.6%.
Canada-United States comparison
In July, Canada had an unemployment rate of 6.1% compared with 6.2% in the US, after adjusting to US concepts. In the 12 months to July, the rate of unemployment in Canada fell by 0.2 percentage points, while it went down 1.1 percentage points in the US.
The employment rate in Canada in July (after adjusting to US concepts) was 62.1%, compared with 59.0% in the US.
Attorney Colin Singer Commentary:
Recent developments seem to follow the improving US labour market. Canadian employers across Canada are expressing increasing concerns about labour shortages. This is especially the case in Alberta, Saskatchewan and British Columbia. It favours those interested in applying for entry to Canada under a work permit or Canadian permanent residence (Alberta immigration, Saskatchewan immigration and British Columbia immigration programs).
Source: Statistics Canada
The unemployment rate in June rose by 0.1 percentage points to 7.1% as more people were searching for work in Canada.
Compared to last year, employment increased by 72,000 or 0.4%. It was the lowest yearly growth rate since February 2010. Little changed in the number of hours worked in the past 12 months.
Among youths aged 15-24, employment declined by 44,000. However, their unemployment rate was not affected much and stood at 13.4% as fewer youths participated in the labour market.
In age group 25-54, employment declined by 26,000, mostly among women. The unemployment rate rose 0.3 percentage points to 6.1%.
Employment increased by 60,000 among people aged 55 and over, bringing their unemployment rate down 0.4 percentage points to 5.8%.
In Ontario, employment fell by 34,000, raising the unemployment rate for the province by 0.2 percentage points to 7.5%. In Newfoundland and Labrador, employment fell by 2,900 in June. It increased by 3,800 in Manitoba and by 2,700 in New Brunswick.
From the second quarter of 2013 to the second quarter of 2014, employment in Yukon was little changed and the unemployment rate fell from 5.3% to 4.3%. During the same period, employment in the Northwest Territories declined by 1,500 and the unemployment rate increased from 7.3% to 9.6%. In Nunavut, employment was little changed and the unemployment rate was also unchanged at 13.6%.
Employment declined in business, building and other support services by 27,000 in June, but was little changed on a year-over-year basis. There were 15,000 fewer people working in agriculture in June.
The number of construction workers rose by 32,000 and by 21,000 in ‘other services,’ such as civic and social organizations and private household services.
There was minimal change in the number of private and public sector employees as well as the self-employed. All growth was seen among private sector employees.
After adjusting to the concepts used in the United States, the unemployment rate in Canada was 6.1%, the same as the rate in the US. The employment rate in Canada in June (adjusted to US concepts) was 62.0%, compared with 59.0% in the United States.