The Eagle Blog

CANADIAN IT JOB MARKET – Mini-Update November/December 2009

General Observations:

The slow recovery is happening … SLOWLY! The markets are rebounding a little, but we do see hiccups even there … however the TSX is currently up around 11,600 which is close to the 52 week high. Many investors have seen some improvement in their portfolios over the last months, but most have not seen a return to the highs they had reached. All of which to say things are improving, but … SLOWLY.

November did see a slight uptick in activity for Eagle over October, which had seen a slight increase over September. Having said that we are starting to see people begin to wind down for the holiday period … and after the year we have all endured, everyone is ready for a break!

November saw Canada add 79,000 jobs and the unemployment rate improve by .1% to 8.5%, however we have still lost 321,000 jobs since October last year. Most employers are still not having a problem finding the resources that they need and the value staffing companies bring in this kind of market is wading through the “many resumes” and being able to find the nuggets, thus saving client’s time and non-productive energy.

The deficit is still a concern, at a projected $55.9 Billion, but the government is still promoting spending as a way to keep the recovery going. (If they would spend a few more of those dollars with us I might feel better about it). Provincial and municipal governments are starting to reduce their spending as they deal with their increased debt and lower tax base (provincial taxes lost through unemployment).

More Specifically:

The GTA (Greater Toronto Area) remains the hottest market for us. It is the largest market in Canada, has the most head offices and is the home of our financial sector. Indeed the financial sector together with the telcos seem to be leading the IT recovery, and we have not yet seen governments increase their IT spending either at the Federal or Provincial levels … if anything, we are seeing less spending from governments, perhaps a reaction to increased scrutiny due to scandals.

Calgary is showing some signs of returning to life, but is certainly not the hot market that it was just a little more than a year ago. It is however probably the one beacon of light in Western Canada, where the other markets are still extremely slow. Of course oil prices recently dropping $8 a barrel doesn’t help and nor does the relatively strong Canadian Dollar against the US Dollar (close to 95 cents). We need Calgary to get “hot” and perhaps the other markets will follow.

Ontario continues to suffer from the devastation to the manufacturing base, the downfall of the auto sector and a business unfriendly government. There is trepidation about what will happen with the introduction of HST, when both Bill 139 and Bill 168 will hurt business and it will be some time before the full effects are known. The Toronto market offers some hope, but maybe this government can do something to “fix” that!

There is little change in the Federal Market in Ottawa. A minority government, a few scandals and some loud opposition to planned projects seems to have put a stop to any interesting large projects hitting the streets. Hopefully that will change in the New Year.

The following are some facts/indicators we are tracking as of time of writing:

> The price of oil has dropped down to around $72 a barrel … not so low as to affect existing projects, but not high enough to create a “boom”.
> Natural Gas prices hit a seven year low in September 2009, but have almost doubled again since that low. This should start to have a trickle effect on confidence in the “energy patch”.
> The TSX is in and around 11,600 … a positive sign.
> The Canadian dollar is strong, currently close to 95c US. Not always a good thing for Canadian business, but a positive economic indicator.
> Prime remains at 2.25%, making borrowing inexpensive. This is good for when companies feel optimistic enough to invest!
> November saw some positive news on the unemployment front, with Canada gaining 79,000 jobs and the unemployment rate improving to 8.5% nationally. Canada still has 321,000 less jobs than in October 2008.
> The Alberta government is forecasting a $7B deficit, and announced government cuts to projects of $430 million.
> Many sectors appear to be picking up activity … banks, oil companies, and telcos all appear to be picking up steam.
> There have been few signs that any “stimulus” package will bring relief in the IT services sector. Hardware companies are benefiting from tax breaks but no big new IT services spending yet!

In Summary:

November saw the continued slow improvement in the economy generically. Some sectors and some geographies are coming back a little faster but generally things are still “in the doldrums”.

As we head into the holiday period I expect people will take time to try and recharge their batteries, it will not be the most productive work period … but I know I need it! Hopefully it means that we will charge out of the gates and make 2010 a banner year.

Did I mention that I’m an optimist?

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