There was not a big change in Canada’s economic circumstances between Q1and Q2 of 2014. The unemployment rate has been hovering close to the 7% mark for some time and finished the quarter at a disappointing 7.1%. Over the previous 12 months Canada has added 72,000 jobs, which is 0.4% growth. After 2 quarters, 2014 is certainly not shaping up to be a banner year for the Canadian economy.
When writing this market review I use a number of “indicators” and try to factor in Eagle’s own experiences, as one of Canada’s larger professional staffing companies. The intent is to give the reader a view “from the trenches” to support the bigger picture view from the statisticians.
I have chosen the TSX as one indicator of the state of Canada’s economy, with the assumption, a healthy economy increases demand for people. If the TSX were the only indicator we would have no problems because it has continued to rise over the last 12 months. The index was at around 15,000 at the end of Q2 which was up about 800 points over the previous 3 months. One could reasonable argue that those TSX companies enjoying this growth will be good targets if you are looking for work.
Despite the environmental challenges facing Canada’s oil sector, the price of a barrel of oil appears to remain fairly healthy ending the quarter at around $108 which was unchanged from the previous quarter. At this price point the sector is typically continuing to invest and grow, which creates job opportunities. Obviously it is not quite that simple with pipeline companies continuing to face political challenges with their projects. Should some of those resolve we can expect another mini boom in this sector.
Canada’s financial sector, centred primarily in Toronto but with a healthy presence in Montreal, continues to be huge employer and a sector to explore if you are a professional looking for work. Regulatory change, innovations in banking, technological advances and the need to address the retiring boomers are all reasons why the banks continue to hire.
The telecommunications sector is another very large sector that is always looking fo talent. The big players are in a very competitive environment, with a need to innovate to attract customers. The demands on their infrastructure, technology advancements, retiring boomers and expansion into new markets are all drivers of their need for people.
Look around the skyline of any of Canada’s larger cities or attempt to do our own renovation project and you will quickly understand the demand for the trades here in Canada. If you add the big oil projects in Alberta and the infrastructure projects across the country this is clearly a sector where the demand seems to be insatiable.
The three levels of government across Canada have always been huge employers and despite the recent focus on reductions in spending and cut backs on headcount there is still opportunity. In addition to the big projects that will result in savings, such as Shared Services and technology projects there is the ticking time bomb of the retiring boomers, who in this “attractive pension” environment, will take retirement.
The Canadian Staffing Index is an indicator of the strength of this sector, which is the largest provider of talent in any economy and an excellent barometer of the health of Canada’s economy. The index has reflected the very slow growth over the last year, and indeed ended Q2 at a reading of 108 which is actually down 7 points from a year ago. Here are Eagle a quarter 2 over quarter 1 comparison saw a 7% increase in people applying for jobs and a 4% decrease in demand from our clients which would suggest a softening job market. This does not tell the whole story however, because there are still shortages of the most in-demand skills
The GTA (Greater Toronto Area) is Canada’s largest metropolitan area and has the most demand for talent, representing 60% of Eagle’s business. The sectors that create the most demand here at Eagle would the the telecommunications sector, the financial sector, the insurance industry, the retail sector and the municipal and provincial governments. We don’t service the construction industry but, it too, is a hot sector in the GTA. We anticipate, with a provincial election done and a majority government in place that there will be an increase in demand from the provincial government as it settles on its major priorities and addresses the impact of impending retirements.
Western Canada has been enjoying a strong resource fuelled economy for some years now, and despite a slowdown in the “boom” it still represents one of the best areas to find a job. Calgary, which has the second most head offices in Canada, and is the hub for the oil patch, is the economic engine of Western Canada. Other cities that have seen decent increases in demand include Regina, Saskatchewan, Vancouver and Winnipeg … although they are much smaller centres and therefore the demand is relatively small.
Eagle’s Eastern Canada region covers Ottawa, Montreal and “the Maritimes”. Montreal continues to be fairly busy, particularly 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 and this market is looking healthier for professionals than in some time, however the National Capital Region has seem an increased unemployment rate over the last while.
The types of people that seem to be in constant demand from our clients has been fairly consistent. We see a consistent demand for Program Managers and Project Managers while Business Analysts are also always in demand. It might just be our focus but Change Management and Organizational Excellence resources are in relatively high demand too. Big data, analytics and mobile expertise are specialisations that we are seeing more and more. On the Finance and Accounting side we see a consistent need for financial analysts, accountants with designations and public accounting experience plus controllers as a fairly consistent talent request. Technology experts with functional expertise in Health Care is another skill set that sees plenty of demand.
While 2014 started with some promise it has not proven to be a boom year. The second quarter saw no appreciable gains over the first quarter, other than in the stock market, which might actually have an impact on upcoming retirement plans as people’s portfolios recover and improve following the recession. We will see more skills shortages in our knowledge economy, partly by fuelled by an increased number of boomers retiring. The US recovery seems to be progressing well which should cause a drag along effect here in Canada too, although Canada/US relations are a little strained currently.
The unemployment rate around 7%, (7.5% in Ontario) is more a reflection of Canada’s move from a manufacturing economy to a knowledge economy, and the demand for professionals remains high. Having said that it is not an easy time to find work for anyone, unless you are have a high demand skill set.
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.