The global economy affects us all, and the events of the past couple of months have been cause for concern. The airline industry was severely impacted by the volcano in Iceland and the Greek economy is in tatters requiring support from the international community. Of course there are lessons to be learned for all of us, that we can’t continue to spend more than we have … at some point in time it catches up. In addition to those negative influences the UK election has a “hung parliament” which will create uncertainty there and likely hinder the recovery in Europe.
Canada continues to outperform the other G8 countries with a generally steady recovery, boosted by last month’s employment figures. The record job increases (biggest in memory at 108,700), the strength of the dollar and even signs that the auto sector is recovering are all good signs. The TSE continues to perform well despite the ups and downs of the markets generically, the housing market appears to be doing well and the staffing industry continues its steady recovery too.
Here at Eagle March was our best month in more than a year, with most markets doing very well and in particular the Toronto area exceptionally busy. Demand for both contract and full-time resources is good and we are even starting to see signs of skills shortages in some areas.
The GTA (Greater Toronto Area) is definitely still the most active market across Canada. We have reached a point where the supply and demand curves are intersecting, with the most skilled resources getting multiple offers. The financial sector and in particular the banks are very busy, the telcos are also very busy. The Ontario provincial government is fairly steady, with a reported pent up demand working through the process and the System integrators appear to be winning more business and therefore in need of resources. There is a healthy demand for both full-time and contract resources within all of those areas.
Western Canada continues to increase the pace with Calgary still the hottest Western market, although demand is steady as opposed to frenetic. The Alberta Government has picked up a little but BC remains a little quiet. Like the GTA, there are signs in the hotter markets that the candidate supply pool is thinning out with key resources getting multiple offers and clients being disappointed if they don’t move quickly to secure these people.
When I talk about Eastern Canada, for Eagle that really means Ottawa and Montreal. The pace in Montreal has picked up somewhat and like the GTA and Calgary the supply of great candidates is dwindling. Also like the GTA it is the financial sector, telcos and system integrators that have the biggest demand. April marks the beginning of the government fiscal year so demand is a little slow in Ottawa while managers understand their budgets and the projects that are funded. Despite Treasury Board initiatives to cut budgets, reports from the Auditor General and the Clerk of the Privy Council indicate that IT spending will not be hit too badly in the near term. There is an expectation that Ottawa should start to get busy in the coming weeks.
The following are some facts/indicators we are watching as of time of writing:
> The price of oil is around $77 a barrel which is down slightly, but still at healthy levels … the activity in Calgary would suggest the oil sector is picking up!
> Natural Gas prices trend down as warm weather approaches (despite the late snow) … given the long term nature of these contracts this sector is currently pretty healthy.
> The TSX continues to do pretty well at just under 12,100 … despite the affects of the Greek crisis and the volcanic ash.
> The Canadian dollar continues to be is very strong, currently about 98cc US. Not always a good thing for Canadian business, but a positive economic indicator.
> Prime remains at 2.25%, making borrowing inexpensive but concerns about inflation and the positive indicators in the Canadian economy have spawned a lot of speculation the rate will rise soon, making borrowing that bit more expensive!
> Canada added a record 108,700 jobs in April, the biggest gain in memory going back as far as 1976.
> Alberta’s provincial government continues to grapple with its unusual situation of a $7B deficit, and the requisite cuts that go with that.
> We are seeing a pickup in activity in most sectors … banks, energy companies, and telcos in particular. There is also some pickup in Municipal, Provincial and Federal Government activity.
> The Canadian government is not expected to drastically reduce its spending this year, which is good news for anyone dependent upon the Feds for business.
> Canada’s Staffing Index would suggest the staffing industry is recovering slowly but surely and is now just 20% off the pre-recession peak of October 2008
The Canadian economy receives glowing praise on the global scene, apparently the best performing economy of the G8 and, this month again we continue to see a general improvement in just about all indicators.
The staffing industry is all about the ebb and flow of supply and demand. When the economy is down there are more people available than jobs. As that trend reverses in a recovering economy, we start to see the first signs of skills shortages. We are seeing those signs NOW in our most active markets, with the most skilled resources having the opportunity to pick and choose between jobs.
Early indicators in May suggest that the pace of demand is not slowing and that we will continue to see skills shortages in the biggest markets, and amongst the most in-demand skill sets. Even with all of the positive indicators most business are still in recovery mode and are still being careful with their costs. The future is looking positive, however we will likely be looking at interest rate increases in the next while, plus Ontario and BC introduce HST in July so we will have see how the economy responds.