In July Canada lost 139,000 full time jobs, replacing 130,000 of them with part time work ... the result was a small increase in the unemployment rate, to 8%. The Canadian Staffing index also dipped slightly by one basis point indicating a drop in hours worked in the Staffing Industry workforce. The drop in work hours is very much expected this time of year, increased vacations being the most obvious driver. In addition, many companies will wait until the Fall to start up new initiatives, creating a lag during the Summer months.
There continues to be volatility in the markets, however the TSX is up a little over this time last month when I reported a reading of 11,586, whereas today it was at 11,788. Of course during this last month the index has been up and down like the proverbial yo-yo, as differing indicators suggest recovery or not! The prime business rate remains at 2.75% having endured two increases recently, however some of the major banks are reducing mortgage rates to try and stimulate borrowing in the housing sector which has taken a hit recently.
The GTA (Greater Toronto Area) continues to lead the way in the return to pre-recession levels of demand. While we are not quite "there" yet, indications are that demand is beginning to outstrip supply as many contract resources are receiving multiple job offers. This creates frustration for those clients who are slow to "pull the trigger" on their hiring decisions. The finance sector is particularly hot as they make up for the projects that were on hold through the recession, and position for future growth. We are also seeing the system integrators increasing their win ratios, which creates demand for contractors to help them with their projects. The other very hot area has been the telecommunications sector, as established players build out systems to compete in this changing arena and the new players develop offerings to take some of that established business. The Ontario provincial government was a little slow this month, but business is traditionally slow in this sector during the Summer, but this is expected to pick up come the Fall.
July was a busy month in Alberta, while Vancouver and the rest of Western Canada enjoyed the more normal Summer quiet expected in July. In Calgary the oil and gas sector continues to increase demand for contract professionals and while not back to the "crazy times" of a couple of years ago, we are seeing the client demand outstripping the supply of specific available candidates. Edmonton had a busy month, which was not expected but very welcome, as a government town that is where the demand came from. Like most markets, our impression is that there is a pent-up demand across the West that will likely hit in September bringing us closer to those pre recession times when the big issue was finding great people, not finding jobs!
In Eagle's Eastern Canada region it is Montreal that continues to be the busier market, with a continuing demand for top talent. Like the GTA it is the financial sector, telcos and system integrators that have the biggest demand. Ottawa on the other hand has seen a fairly slow market get even slower as the Summer holiday period hit. The city was busy with tourists, but the job market was very slow. Once again the Fall is anticipated to bring an increase in demand, which will be welcomed by most suppliers.
The following are some facts/indicators we are watching as of time of writing:
> The price of oil is a little over $75 a barrel, down a couple of dollars from last month ... activity in the oil patch continues to be busy.
> Natural Gas prices have been trending down, mostly due to Summer usage and increased stocks.
> The markets continue to be pretty volatile, however the TSX was up a little to 11,781 as opposed to last month's index of 11,586.
> The Canadian dollar was up a little from last month at $97.83c US.
> Prime stayed put at 2.75% after two recent increases!
> Canada added lost 139,000 full time jobs and gained 130,000 part time jobs resulting in a slight increase in the unemployment rate to 8% from 7.9%.
> 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. Candidates are getting multiple offers and we are seeing more "turndowns" of job offers, indicative of an increase in demand.
> 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 continue to suffer a little for that.
> Canada's Staffing Index dropped slightly, but it was expected with Summer vacations taking a bite out of the hours worked. The index was at 85, versus 86 in June .. still 15 basis points off the benchmark of 100 set in July 2008.
Canada continues to perform well in comparison to other countries and the unemployment rates are one indicator of that. The Canadian unemployment rate is 8% versus the EU which is around 10% and the US around 9.5%. The Canadian dollar is also consistently strong and many indicators are good that our recovery is continuing. Having said that, we are not out of the woods yet, Canada's Staffing index would suggest that we are still 15 basis points off the pre-recession benchmark, and even farther behind the record highs we saw during the boom.
From Eagle's perspective, all of the major markets are picking up in demand and we are seeing an across the board increase in "multiple offer" scenarios and job "turndowns". These are indicators of that increase in demand, and good news for job seekers. The Summer slowdown was expected and yet is not AS slow as expected, but given the wonderful weather we have experienced in Central Canada it is no wonder people are taking time to enjoy it and to recharge the batteries.
I don't anticipate much change to this report next month, but September should see a surge in demand and will be a real indicator as to whether companies are really going to ramp up again.