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CANADIAN IT JOB MARKET -- Mini update August/September 2009
In July Canada announced that the recession was over, and August saw Ben Bernanke also announce that the recession was technically over in the US. US retail sales rose at the fastest pace in 3 遜 years, however the US continues to suffer from the recession that has cost 6.9 million jobs since December 2007! August in Canada saw the unemployment rate increase to 8.7% but Canada did add 27,000 jobs. There is positive sentiment everywhere you look (at last) and various signs that things are "on the mend".
Here at Eagle continue to see a steady increase in orders from our clients. The GTA (Greater Toronto Area) continues to be the busiest market, and Alberta is "talking" about being busy but has not "got there" yet. The news that Encana is going ahead with its split into two entities will be a boost in that market, although the loss of 1,000 jobs coming because of the Suncor/PetroCan merger will hurt. Ottawa continues to confound, with some activity but nothing to cause celebration and talk of a Fall election (the 4th in 6 years) that will just shut down any procurement activity! Montreal and Eastern Canada remain slow, although they have been slower ... so its not all bad! On the candidate flow side of things the flow of resumes has been consistently quite high over the last three months, with little variation during that time ... again it is the GTA that is the hot spot, probably representing more than 50% of both opportunities and resumes that we are seeing.
The following are some facts/indicators we are watching as of time of writing:
> The price of oil is still in the $70 range which should result in the oil companies ramping up some projects. We are seeing early signs of this.
> Natural Gas prices have been hovering down at seven year lows recently and that has a big impact in the oil and gas world of Alberta in particular.
> The TSX moved up close to the 11,500 range and has been over 10,000 for a while ... a positive sign.
> The Canadian dollar is strong, currently above 92c US.
> Prime remains at 2.25%, making borrowing inexpensive. This is good for when companies feel optimistic enough to invest!
> Ben Bernanke in the US and Mark Carney in Canada have both declared that the recession is "technically' over.
> Unemployment is still bad ... now up to 8.7% nationally but Canada did add 27,000 jobs in August.
> The Alberta government is forecasting a $3B deficit, (an anomaly for that province), so it will affect government spending.
> The BC Government introduced tax breaks for oil companies ... which might poach some business from Alberta?
> Many sectors appear to be picking up activity ... banks, oil companies, provincial governments and telcos all appear to be picking up steam.
> There have been few signs that any "stimulus" package will bring relief in the IT services sector. Hardware companies are benefiting from tax breaks but no big new IT services spending yet!
"They" said the recovery would be slow ... and it appears "they" are right! The indicators we see suggest that we have made significant progress in the last three months, most markets are busier and in particular Toronto and its environs and getting quite "hot". The Fall will be most telling as companies knuckle down after the Summer holidays are all done and the "kids" are back in school. Traditionally it is a busier time and we are anticipating a bigger increase in demand over the coming couple of months. Of course a Fall election could hurt the National Capital region, an "economic relapse" could hurt the whole country and a precipitous drop in oil prices would hurt Western Canada! We live in precarious times ... so I am calling for (a) NO election (I read that the Bloc might help stave the election off), (b) lets all remain positive and spend lots of money to keep the economy going and (c) I am going to drive my gas guzzling sports car lots to support my Western clients (sorry to the Green Movement, I'll support you when we are all stable again!)