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The fourth quarter was more of the same for the Canadian job market. With its largest trading partner, the US, still in recovery mode there was no sign of booming economy here. Canada's economy has continued to fare better than many and we have added 102,000 jobs through the year, but that included a setback in December that saw 46,000 jobs disappear. Canada started this quarter with an unemployment rate of 6.9% but finished at a disappointing 7.2%.
In creating this summary I look at a number of "big picture" factors 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. In the 4th quarter the TSX enjoyed some growth from a starting point around 12,750 to around 13,250 near end of the quarter. It has been an interesting observation that decent share price performance since the recession has not necessarily translated into job growth but it remains a factor because, for sure, poor share performance would result in job losses.
Canada's oil and gas sector is one of its hottest economies, but it is the oil sector specifically that has been the big performer in recent years. The price of a barrel of oil is a big indicator of investment potential and during the 4th quarter the price remained above $100 a barrel, indicating a healthy appetite for investment. The biggest markets affected by the industry have been Alberta and Saskatchewan but BC is also a beneficiary of this sector. The December endorsement of the Northern Gateway pipeline is a good step for the industry which could result in significant job growth in Alberta and BC specifically. A positive decision on the Keystone pipeline would be a further boost to the industry and result in a mini boom in Western Canada and a positive impact on Canada's economy. This sector employs huge amounts of people across all professions and trades and continues to be a big area of opportunity to job seekers.
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 continued competition between the banks means they all invest heavily in their IT infrastructure which creates job opportunities for that's discipline.
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. Currently all of the telephone companies are continuing to invest in building out their offerings which is a good opportunity for professionals in the technology sector.
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. The opportunity in government comes from the technology projects underway to modernise their services, and in the replacement of their large base of retirees.
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 marginally stronger through 2013 than in 2012, which would indicate a fairly robust staffing sector. Here at Eagle, for the second consecutive quarter, we saw a slight decrease (5%) in people applying for jobs. Over that same time we have seen small increases each quarter (1.5% and 3.5%) in demand from our clients. Anecdotally this would suggest that in the professional space we are seeing greater demand and less availability of talent.
The GTA (Greater Toronto Area) continues to be the largest market for talent in Canada, generating the most demand. Here at Eagle our GTA region typically represents 60% of our client demand. It is Canada's financial hub, houses the most head offices in Canada and is the most populous area. 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 telecommunications, financial, 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. The fourth quarter was fairly steady with demand for talent. Clients seemed to be a little pickier in their needs but there continues to be a low availability of great talent. 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 has continued its rare period of uncertainty, rather than the traditional "boom or bust" type of cycle. This has resulted in mixed market signals and static wages/rates for most of 2013. Even with positive news on Enbridge's Northern Gateway project we can expect this cycle to remain for some time.
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 is moving ahead on some large initiatives which is creating some demand however the market remains relatively flat.
The demand from our clients in 2013 was consistent. We saw a steady demand for 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 fourth quarter look at the job market includes the holiday period in December and the way that the holidays fell this year meant a longer than usual break for many people. This dampened demand and slowed hiring, but I expect this to correct as we head into 2014.
For those people willing to go where the work is we see continued opportunity in the oil patch, with obvious demand in Fort McMurray and all areas related to the oil sands. The cities with higher talent demand include the GTA, Calgary, Regina, Montreal, Edmonton and to a lesser degree Winnipeg, Vancouver and Saskatoon. 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.