CANADIAN IT JOB MARKET -- Mini update June/July 2010
June saw Canada add 93.000 jobs bringing the total added since July 2009 to 403,000. That basically means we have replaced almost all of the jobs lost through the recession. The unemployment rate also dropped below 8% for the first time since January 2009. Of course the "big picture" can also hide some realities. Before the recession the unemployment rate was closer to 6%, so today there are more people unemployed than back then ... possibly because of seasonally adjusted rates. Also, the job boom for June was almost exclusively in Ontario and Quebec, while the Eastern provinces actually lost jobs.
There continues to be volatility in the markets, and for the second month in a row the TSX dropped little, however that reading is a point in time which could well have righted by the time you read this. Interest rates were hiked again, the second time in two months, making the Prime Rate now 2.75%. I guess the Feds didn't want McGuinty getting all the tax dollars (with his HST implemented effective july 1st). Canada's Staffing Index saw a big jump of 7 points in June, which is indicative of increased demand for labor heading into the Summer months, obviously a trend we would like to see continue!
The "buzz" in the staffing industry continues to highlight the GTA (Greater Toronto Area) as the engine of growth and the most active market across Canada. Month over month there is little changed, just a little more pressure as the best candidates get snapped up and demand continues to increase. The incidence of "multiple offers" and "turndowns" by qualified candidates is on the rise, indicative of a market that is definitely getting hot. The two hottest sectors continue to be the financial sector and the telecommunications industries, but we are also seeing a lot of activity with the large system integrators. That is a very good indicator because large clients are now engaging the integrators for major projects again ... another sign of some confidence and a need to "get things done". The Ontario provincial government continues to slowly increase its demand, as it catches up on some pent up demand. There is a healthy demand for both full-time and contract resources within all of those areas.
The mood across our Western Canada markets continues to improve, and other than market-specific activities getting in the way of business (Stampede Week), we are hopeful that things are improving across the board. Calgary has been, and continues to be the hottest Western market and June was very busy there. Edmonton also had a busy month as the provincial government ramps up prior to the Summer holidays impacting. Vancouver may be getting past it's "post-Olympics hangover" as demand also seemed to pick up in June. Overall it was a busy month for all of Eagle's Western offices which also saw their share of "multiple offer" scenarios.
In Eagle's Eastern Canada region Montreal has continued to be fairly strong market and here too we are seeing a shortage of the most in demand candidates. Like the GTA it is the financial sector, telcos and system integrators that have the biggest demand. In the National Capital Region there has been a fairly steady demand over the month and some large RFP activity as departments position themselves for future demand.
The following are some facts/indicators we are watching as of time of writing:
> The price of oil is a little over $77 a barrel, basically unchanged from last month ... our experience with the activity in Calgary would suggest the oil sector is picking up! Perhaps as a result of stable oil prices, despite the BP woes in the Gulf.
> Natural Gas prices have been trending down, probably due to Summer usage and increased stocks ... nothing crazy here.
> The markets continue to be pretty volatile, with the TSX down a little from last month at 11,586 today but that's still a pretty healthy level.
> The Canadian dollar has fallen a little from last month, currently sitting at 95.49c US.
> Prime was raised to 2.75% in July, the second hike in two months so borrowing continues keeps getting more expensive!
> Canada added 93,000 jobs in June which effectively replaces all jobs lost during the recession (403,000 added since July 2009). The unemployment rate dropped below 8% to 7.9%, for the first time since January 2009.
> Eagle continues to see a pickup in activity in most sectors ... banks, energy companies, and telcos in particular. There is also some pickup in Municipal and Provincial Government activity.
> The Canadian government, while not expected to drastically reduce its spending this year has not really "wowed" the market with its spending. There has not been a lot of new IT business and the National Capital companies are suffering a little for that.
> Canada's Staffing Index increased significantly this month, by 7 points. This puts the index at 86, which is just 14% off the pre-recession baseline set in July 2008.
Increased interest rates and the introduction of HST will dampen the recovery a little, and there does seem to be a concern that this recovery is still not "a given". Having said that, we have seen a steady increase in demand over the last several months, and the Canadian Staffing Index continues to demonstrate a positive (but generally cautious) trend.
Canada's employment figures are promising and if we can keep things heading this way all will be well. Canada is however impacted by global events and that is the wild card, if the world's economies cannot sustain their recovery then we will be caught in that. For now, I am optimistic, everything we are seeing in our world indicates that the job situation is good and getting even better ... keep your fingers crossed!
PS. Last month I referenced the World Cup and getting the right result! Born in England I had hopes, which of course were smashed ... but I can't argue with the eventual winner, Spain were awesome!
CANADIAN IT JOB MARKET -- Mini update June/July 2010