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It would be my general observation that 2013 has been a disappointing year for the many who were hopeful of better. From a labour perspective growth has been slower in the first half of 2013 than during the last half of 2012, with the average monthly growth in jobs at about half of what it was. Canada finished Q2 with an unemployment rate of 7.1% which is in the same ball park as we have seen for some time now. On a positive note there were 242,000 more jobs in Canada than 12 months previously, it was just not as significant as expected. Putting that all into perspective, Canada is still faring better than most global economies.
There are many factors that affect the job market in Canada and by tracking these we can understand why our economy is not yet firing on all cylinders.
The stock market is one such indicator and the TSX is just one guide there. If public companies are doing well then they may invest in people, in projects and in R&D. When companies are not doing so well then they might not make such investments, in fact you may see layoffs and downsizing in an effort to correct the stock price. The TSX has been a good indicator of our economy, it has been erratic but for the most part within a reasonable set of parameters. The TSX reads 12,500 as I write this article, which is about the mid-point of its fluctuations for this last quarter and 1,000 points above its low of 12 months ago. The result is public companies are generically reluctant to make big investments, in case the bottom falls out of our fragile economy.
The "oil patch" is one of Canada's hottest economies, but to some is known as the oil and (natural) gas sector. Natural gas prices have been very low for some time, so it is purely the oil sector, and the industries that feed it, that have been "booming" since the recession. With a barrel of oil costing more than $100, the indicators are good that these companies will continue to invest. Having said that, political concerns related to Keystone and other pipeline projects, together with ongoing environmental concerns, have caused this sector to not boom like it otherwise might.
The banks operate in a very competitive sector and all make significant investments in projects, technology and people in order to compete and differentiate from their competition. With Canadian banks somewhat insulated from the banking sector woes in other countries, we can expect this sector to continue to be an engine of growth for Canadian job seekers.
The telecommunications sector is another very competitive world. Recent decision potentially allowing larger foreign companies to compete through acquisition might even increase that competitiveness. New offerings and technology projects mean these are big employers and always in need of skilled people with the right experience.
The trades continue to be in big demand across Canada, with large construction projects in most of the big Canadian cities together with such large initiatives in the oil sands etc.
Governments across Canada continue to implement austerity measures, downsize and cut back on programs. The Federal government has reduced its workforce to about 133,000 employees from a high of 155,000 in recent months. Coupled with the demise of the bigger tech employers over the last decade, this has meant the National Capital Region has not been a great place to look for work. Ontario continues to wrestle with its budget woes, a minority government and multiple "crises". Alberta was already coping with a budget deficit, when the floods hit which will cost the province likely $5 or 6 Billion. These are two of the larger provinces and they are not in a position to do a whole bunch of hiring. All that said, the government vertical remains a tough one to find jobs!
Canada, like the rest of the world, was expecting to be dealing with the effects of a retiring "boomer" population by now. The recession and the impact on retirement savings put retirement plans on hold for many, so we have not yet seen a mass exodus from the workforce. These phenomena will happen and will be a factor in the job market in the coming months and years, particular where good pensions are involved. This will affect the larger institutions (banks and telcos) along with all levels of government.
Canada's staffing industry is an excellent barometer of the health of our economy and the Canadian Staffing Index reflects the strength of our job sector. This index was trending up throughout 2012 and in the first couple of months in 2013 is trending about the same as the first quarter of 2012. Here at Eagle we saw about 16% more people applying for jobs in the second quarter of 2013 over the first quarter. At the same time we saw an 8% decrease in demand from our clients. Anecdotally this would support the other indicators that Canadian economic growth is disappointing.
There is little change in the GTA (Greater Toronto Area), except perhaps a slight slowing in demand in the second quarter. Toronto is Canada's financial hub, has the most head offices and creates the biggest demand for skilled labour. The sectors that we see as the most active continue to be the Financial, telecommunications, construction and service industries.
Calgary has the second most head offices in Canada, is far smaller than Toronto but is the economic hub of Western Canada. It is still to be determined what the true cost of the floods in Calgary will be, but the clean-up is estimated at $5 or $6 Billion, the cost to the economy of the lost productivity will be even more significant. Oil revenues are generated in other cities too, notably Regina and Edmonton where provincial government benefits from the associated taxes. The West generically is a good place to be looking for work, particularly if you are willing to endure a little hardship in places like Fort McMurray. In recent months demand has tapered a little, there have been some downsizing exercises and the extreme skill shortages of the boom times are a thing of the past. This will change in the boom and bust world of Western Canada particularly if the gas sector picks up and when some of the pipeline projects proceed.
Eagle's Eastern Canada region covers Ottawa, Montreal and "the Maritimes". Montreal continues to be busy in the financial sector, the telcos and the construction industry. There is also some demand in St John's, NFLD (population about 200,000), and in Halifax (approx. 400,000) but everything is relative and they are not big markets. Ottawa's dependence on the Federal Government means it remains a tough place to find work, although some larger projects are now being awarded, most notably the "shared services' email project to Bell/CGI recently. This may provide a needed boost to that economy.
Some trends we are seeing across the country include demand for change management resources, lean experts, health informatics professionals, mobile developers and increased demand around big data. Business analysts, financial analysts, controllers, project managers and web developers all seem to have decent demand too.
As I mentioned at the start, 2013 started slowly and has not really picked up. The world economic situation has not helped, natural disasters such as major flooding in Calgary, together with political decisions such as blocking of the Keystone project have also not helped. With all levels of government also struggling to manage their deficits we are not likely to see a boom in the near future.
If you are looking for work, the cities to be in would include the GTA, Calgary and possibly Montreal. Regina, Vancouver and Edmonton also have reasonable demand for people, particularly skilled resources. The industry sectors that have the most demand have not changed and include banking, insurance, construction, telecommunications and the sectors that serve those industries.
That was my quarterly look at the Canadian job market and some of its influences.
Kevin Dee is CEO of Eagle (a Professional Staffing Company)
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