The Summer months generally result in a slowdown in the job market. Decision makers and hiring managers take time off, getting approvals is a little tougher and often everything just takes longer. That is reflected in the unemployment numbers, with July and August being relatively flat after three months of growth. Canada’s unemployment rate in August was up very marginally 7.3% from 7.2% in July. Overall Canada has added 223,000 jobs in the last twelve months.
At time of writing, the Canadian Dollar remains strong against the US dollar, and is still above par at close to $1.01 US … although the markets continue to be very volatile. While Canada’s economy continues to perform better than most, it is not immune to events around the world. Europe in particular continues to struggle with sovereign debt issues, particularly with the PIIGS. The US unveiled another stimulus package to try and keep interest rates low, and stimulate some spending. The results can be seen in the stock markets where the TSX is down about 100 points from last month, currently at 12,131. The oil patch continues to be somewhat strong, but certainly lower than the highs of just a few months ago … current price per barrel sits at about $86.90, up almost $3 from last month.
Here at Eagle, the August volumes were very similar to July volumes, but we have seen increases beginning late August and early September. Judging from that, we would expect September to reflect a moderate uptick in demand for labour, continuing to improve as we hit October … barring the effect of any world catastrophes.
Anecdotally, when speaking to my peers in the staffing industry, the GTA(Greater Toronto Area) remains the hottest job market in Canada. We have our fingers crossed that world events will not adversely affect this, and look forward to a robust labour market through the Fall. The buzz in the city may have heated up during the film festival (TIFF) but the job market buzz has been pretty constant for some months now. We are definitely moving to a market where more and more candidates are getting multiple job offers, increasing the demand for clients to move quickly when making hiring decisions. The Ontario election campaign is in full swing with voting early October, following which the Ontario government will likely be more decisive in its mandate, and thus hiring plans.
Calgary is still very much the engine of growth in Western Canada and is almost as busy as the GTA. A reasonably strong price per barrel of oil plays a large factor in the demand, and that sector affects many other ancillary industries too … all of which create their own demand for labour. That would include industries serving the oil and gas companies, system integrators and even government … which creates demand in Edmonton and other Western capitals.
In Eagle’s Eastern Canada region, comprised of Ottawa, Montreal and the Maritimes it is still Montreal that is the busiest market. In recent years Ottawa has become much more dependent upon government business due to a shrinking high tech sector, particularly with the demise of Nortel. So, word of major downsizing in the ranks of the federal government, and the pending large shared services initiative has created an air of uncertainty, resulting in a slow-down in demand for labour in Ottawa. The Maritimes is typically a smaller and more diverse market, and we do not ever see big demand among those provinces. Our expectation is that Ottawa will get busier as the Fall unfolds, bringing more certainty about what the future holds for the public service.
The following are some facts/indicators we are watching as of time of writing:
> the price of oil was up about $3 from last month at close to $87.
> The TSX lost a whopping another 100 points this month, following 1,000 points lost last month, and currently sits at 12,131.
> The Canadian dollar is about the same as last month at close to $1.01 US.
> Prime remains at 3% and is expected to remain steady until the markets stabilize.
> Canada’s unemployment rate dropped a little to 7.3%, from 7.2%.
> Eagle continues to be busy in its largest markets Toronto and Calgary with steady business in most other markets. August saw a slight increase in volumes over July and early signs in September would suggest that trend is continuing.
The Summer months saw a slight downturn in demand for labour after three strong months of growth. This was not unexpected and signs suggest that September demand is increasing already.
My staffing industry colleagues continue to see healthy demand from their clients in the larger centres, with Toronto and Calgary leading the way, and other markets such as Montreal and Edmonton also showing some strength. The industries that we see generating demand for professional help are the financial sector, retail, utilities companies, telecommunications, system integration companies and some levels of government.
Canada’s economy is strong in comparison to most of the world, but we operate in a global community and get caught up in the issues affecting the EU and the US. Stock markets remain volatile and the price of oil is affected by world events, so adverse conditions will affect employment here in Canada. Our economy remains vulnerable to the sovereign debt issues of the EU, the political & economic instability of the US, plus the risk of natural disasters that might occur (hurricanes come to mind this time of year). The willingness of some unions to threaten action during this fragile time could also hurt our ability to create jobs.
At face value, looking at the demand from our clients I expect a continued increase in demand for skilled labour over the coming months. As mentioned earlier, the hottest markets are even experiencing some skills shortages, therefore hiring managers need to keep this in mind, despite the doom and gloom around the world!
As has become my recent practice, 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.