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The job market is of course dependent upon the economy, which is in turn influenced by many factors. Canada is still very dependent upon the US market, which during the third quarter had some decent signs but did not "blow the socks off", and of course is currently embroiled in the political quagmire on the precipice of default. With that as a backdrop it is no wonder that Canada's economy has not "taken off" as was expected in 2013. The third quarter continues the trend of showing some good indicators but a general feeling that we take "two steps forward and one step back". The growth in jobs this quarter slowed from last quarter and while we have 212,000 more jobs than 12 months ago, we have 8,000 less than last quarter. Canada finished Q3 with an unemployment rate of 6.9%, an improvement on the 7.1% unemployment rate last quarter however the gain appears to be in "less youth looking for work".
I look at several "big picture" factors when preparing this report, in addition to Eagle's own experiences on the "front end" of providing talent to our clients across the country.
The stock market is one "big picture" 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 and has been somewhat erratic, but for the most part within a reasonable set of parameters. At around 12,900 when writing this article the TSX is at about the high end of its fluctuations for this last quarter and 1,200 points above the quarter low point. As mentioned earlier, this is a good indicator for the economy, however we are not seeing this translate into major investment from public companies or any serious job growth.
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 continue to be low and therefore it is the oil sector, and the industries that feed it, that have been the engine of growth. With a barrel of oil continuing to cost more than $100, the indicators are good that these companies will continue to invest. Once again the reality is a little different as companies await (hopefully) approvals for major pipeline projects such as Keystone and Northern Gateway. A positive outcome on these projects is anticipated to create significant demand for people.
The financial sector continues to be a strong engine of growth here in Canada, with Toronto to a large extent and Montreal to a lesser degree being the centers that benefit from their talent demands. Like most sectors the banks continue to look at the cost base and are prudent in their hiring. The banks are one of the industries likely to be impacted as the boomers take their pensions, which might create an opportunity for those coming through the ranks and for new employees.
The telecommunications sector is another very competitive world, and a huge Canadian employer. The need to be competitive means they invest heavily in technology and infrastructure, creating and sustaining a large workforce. The potential for foreign competition in this sector is causing some debate about the potential negative impact on Canadian jobs.
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 significantly over the last year, and all levels of government are struggling with this same issue. The other issue that governments face is the sheer number of impending retirees, which will increase job opportunities but may cause some "brain drain" issues. 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. The index has been generally stronger in 2013 than in 2012, which would indicate a fairly robust staffing sector. Here at Eagle we saw a slight decrease (5%) in people applying for jobs in the third quarter of 2013 over the second quarter. At the same time we saw a very small increase (1.5%) in demand from our clients.
The GTA (Greater Toronto Area) continues to be the largest market for talent in Canada, generating the most demand. It is the primary financial centre, houses the most head offices in Canada and is the most populous area. Here at Eagle demand in the GTA far outstrips all other markets, even when the West is booming. In recent times we have seen an increase in demand in the insurance sector, joining the other "hotter" sectors in demand for talent. Those other hot sectors include 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. While the Calgary area was hard hit by floods earlier in the year, the third quarter saw a general return to more normal business levels. The continued strength of the oil sector is good for this region and its governments, although like governments everywhere they are trying to reduce spending. The West continues to be a good place to find work particularly for engineers and people in the industries that service the oil sector. Calgary business has traditionally been very cyclical, either full speed ahead or full stop! Due to uncertain mid-stream capacity (i.e. pipelines, rail, trucking, etc.), the market has been caught "in-between" for some time, creating a rare "sideways market" for talent. This has resulted in mixed market signals and static wages/rates for most of 2013. I don't expect a boom in demand until (if?) the pipeline projects get approved.
Eagle's Eastern Canada region covers Ottawa, Montreal and "the Maritimes". Montreal continues to be fairly 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. The federal Government in Ottawa are expected to proceed with some projects which will be good for employment in Ottawa, but at the same time they have reduced their own headcount significantly.
The demand from our clients has been pretty consistent this year with the types of resources in big demand including change management resources, lean experts, health informatics professionals, security specialists, network experts, 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.
The third quarter look at the job market includes the Summer months when vacations can impact client demand. Generally the economy has been "OK" but not great, and while many indicators have been positive, such as an unemployment rate of 6.9%, a stock market that is performing reasonably well and a strong oil sector we have not seen a big increase in demand for resources.
The cities with the bigger demand for skilled resources have not really changed and so if I were looking for work I would want to be in the GTA, Calgary or 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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