Eagle Vision Quarterly Newsletter

December 2013

Richard L. Simms
President, Black Eagle Executive Search


As the 2013 has now drawn to a close, an excellent summary of the 2013 labour market in Canada was outlined in the Globe and Mail:

January 11, 2014:

The country shed a surprising 45,900 positions in December while the jobless rate climbed three notches to 7.2 %, leaving it similar to year-earlier levels.

One month doesn't make a trend, and the employment drop comes after modest increases in the previous three months. Still, job growth petered out as the year went on, resulting in average gains of 8,500 a month – a third of the monthly pace in 2012.

“The December numbers were disappointing but it’s just one month – when you look at the trend, it’s slow growth, in line with the Canadian economy,” said Benoit Durocher, Montreal-based senior economist at Desjardins Securities.

The pace of hiring could pick up, for several reasons. The U.S. economy, where most of Canada’s exports flow, is finally on sturdier ground. And the weaker Canadian dollar may finally give manufacturers and exporters the confidence to invest and hire.

“Everything suggests that the gradual improvement of global economic conditions will allow the Canadian labour market… to improve in 2014,” said Mr. Durocher.

Several factors made employers reticent to hire, from slow growth to uneven external demand, lower commodity prices, heated competition and, on the government side, reduced budgets. In the second half of the year, a string of companies, from Sears Canada Inc. to Potash Corp. of Saskatchewan Inc. and BlackBerry Ltd., announced job cuts while a wave of manufacturers, particularly in Central Canada, said they plan to close plants.

Last month’s job losses were all in full-time positions, which tumbled by 60,000. In the past year, full-time employment was little changed.

And part-time positions have risen 2.5 per cent, a reflection of wobbly confidence.

Ontario bore the brunt of last month’s job losses. Its unemployment rate climbed to 7.9 % from 7.2 % as the business services, agriculture and natural resources sectors reduced head count.

Workers ditched self-employment. The ranks of the self-employed fell by 37,900 in the month, while private-sector firms – which account for the bulk of last year’s job growth – trimmed 26,300 positions and the public sector added 18,200 jobs in December, Statistics Canada said.

It wasn’t all glum news. For those who had jobs, wage gains held steady at 2.4 % from a year ago. British Columbia and Newfoundland created jobs last month, with Newfoundland’s average jobless rate last year falling to its lowest point since record-keeping began in 1976.

Alberta led the pace of hiring last year, while Saskatchewan ended 2013 with the lowest jobless rate in Canada, at 3.9 %.

Among sectors, the only industries that tallied meaningful job growth last year were in professional, scientific and technical services, and natural resources – industries that tend to have better pay – Statscan said. Losses happened in agriculture, educational services, public administration and manufacturing. Construction has now shed jobs for four consecutive months.

There are several soft spots, among them a youth jobless rate that hit 14% last month, with little employment growth last year. And long-term unemployment remains elevated, with the number of Canadians out of work for prolonged stretches well above prerecession levels.

And December figures from the U.S. Department of Labor:

January 10, 2014

The unemployment rate declined from 7.0 % to 6.7 % in December, while total nonfarm payroll employment edged up (+74,000), the U.S. Bureau of Labor Statistics reported today.                                                                                                                                       

Over the year, the number of unemployed persons and the unemployment rate were down by 1.9 million and 1.2 % respectively.

 

Overall summary – after a slow growth year in 2013, employment prospects in Canada for 2014 are definitely brighter.

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