After three months of growth, employment in Canada basically remained steady in July, although there were regional differences such as Ontario losing jobs and Alberta gaining jobs. The employment rate did however improve from 7.4% to 7.2%, primarily because less people participated in the labour market. Overall Canada has added 252,000 jobs since July 2010.
The Canadian Dollar weakened slightly against the US dollar but is still above par at $1.01 US. The strong dollar is one indicator of the strength of Canada’s economy, and while it can help in terms of buying power it hurts the sale of Canadian content. The world markets continue to be exceptionally volatile and over this last month we saw a number of events. The US credit rating was downgraded to AA+, partially caused by the debt ceiling debacle that shook the world’s financial systems even harder! We saw riots in the UK that are partially blamed on austerity measures and unemployment. The “PIGS” continue to cause concern within the EU and around the world. The result of all this turmoil has been some of the biggest market declines since the recession! Despite a strong Canadian economy the TSX has not been immune to the impact of these events. After many months of a steady recovery on the TSX it has been hammered, and today sits more than 1,000 points down from when I wrote this update last month … today’s reading 12,308 versus 13,324 a month ago. Oil too has been affected with the price per barrel, although still healthy, down to $84 a barrel versus $97.99 a month ago.
Here at Eagle, the July volumes both in terms of resumes submitted and orders received from our clients was down very slightly from the previous two months, however we would attribute that to the typical Summer vacation period and not to a downturn in demand.
We have seen little change in the GTA(Greater Toronto Area) and it remains the hottest job market in Canada. Although the concerns about the world markets may yet affect this, it is the financial sector that continues to drive demand, with the telecommunication sector close behind. There is a general buzz in the city and we are regularly seeing candidates turn down good offers because they have several to choose from. The Ontario election will come in the fall, and until that is all said and done the government sector will be a little slower in demand than the rest of the market. Summer vacations caused a little slowdown in demand and decision making, but nothing more than the normal annual July slowdown.
Again, little change month over month in Western Canada with Calgary almost as busy as the GTA. The resources sector continues to have high demand and like the GTA we are seeing a regular trend of candidates having multiple offers from which to pick and choose. Other Western markets are steadily busy, but not at the same scale as the big two Canadian (head office) cities Toronto and Calgary.
In Eagle’s Eastern Canada region, comprised of Ottawa, Montreal and the Maritimes it is still Montreal that is the busiest market. Ottawa remains a little slow as the government works through it plans for renewal and shared services, and the influence of the summer vacation period. Ottawa expects to get busy in the fall, as new requirements hit the street and some promised larger initiatives start to shape up. The Maritimes continues to be a slow area for Eagle, and Canada’s employment numbers would suggest the region continues to struggle.
The following are some facts/indicators we are watching as of time of writing:
> the price of oil dropped a fair bit, from $98 a barrel to $84.
> The TSX lost a whopping 1,000 points month over month as the markets are generally hammered. Current reading is 12,240 as against 13,324 last month.
> The Canadian dollar remains strong at $1.01 US, down slightly from $1.03 last month.
> Prime remains at 3% and is expected to remain steady through to the fall.
> Canada did not add or lose jobs in July, but the unemployment rate improved from 7.4% to 7.2%.
> Eagle continues to be busy in its largest markets Toronto and Calgary with steady business in most other markets.
This past month has been tough on the world’s economy. The protracted US debate about the debt ceiling led directly to the US credit rating downgrade and contributed greatly to undermining the already shaky confidence in the world’s markets. When the EU continued to highlight the struggles of the “PIGS” and the UK suffered riots somewhat attributed to the austerity measures and high unemployment the effect on the markets was probably unavoidable. The markets have tumbled, but most experts suggest this is not like the recession and expect the markets to come back, however a very recent report suggests that the US and EU are both very close to slipping into recession. A tough backdrop for an update on employment!
Canada has fared well, despite all of the above. Our employment rate improved to 7.2%, we have added 252,000 jobs over the last 12 months and we remain one of the brighter lights in an increasingly bleak world economy.
Across the country we have not seen any appreciable decline in demand, other than a slight seasonal dip attributable to the summer vacation period. The two hottest markets, Toronto and Calgary, continue to set the pace yet there are decent signs in most markets. We are hearing from many clients that they expect to pick up the pace of their projects in the fall, our government clients both Federal and Provincial seem to fall into that camp too. The early October election Ontario may slow things a little, but opportunity should follow. The Federal Government seems to be bringing change forward which can only mean opportunity in the National Capital Region, which will be a breath of fresh air for that market. Montreal continues to be fairly busy and most of the smaller markets should be adding jobs this fall.
Unless the world slips back into recession I anticipate strong demand for skilled labour this Fall, which will lead to skills shortages which we are already seeing in those two very hot markets (Toronto and Calgary). Hence I will end this write up with my “standing advice” to ANY company needing people:
(a) Start the process now with a strong PLANNING phase; (b) Develop very clean processes to find, screen, choose, hire and onboard these new resources; (c) Know that you will have a lot of competition and therefore speed in decision making will be critical; (d) The job doesn’t stop there … retention becomes the next challenge!
That was my monthly look at the Canadian job market and some of its influences.