Canada’s jobs market is mirroring the country’s sharply divided economic landscape, as the resource-rich West hungers for workers while confidence falters among employers in the East.
The country’s jobless rate hit a nine-month high of 7.6 per cent in January and job growth has stalled since last summer.
Behind the aggregate figures, though, a clear picture of the country’s diverging economic fortunes emerges. Unemployment rates are higher than the national average in every province east of Manitoba, and below the average across the four western provinces.
“The attitudes that you see in the West are very different from Eastern or Central Canada,” said Hilary Predy, Edmonton-based associate vice president at Adecco, one of the largest staffing firms in Canada.
Employers, particularly in Alberta and Saskatchewan, have enough confidence in long-term demand that they’re hiring on a permanent basis, while those in Eastern and Central Canada are holding back amid concerns about economic conditions in Europe and the U.S., she said. Any hiring they are doing tends to be on a temporary basis, she said.
Two announcements on Friday illustrate this division. Caterpillar Inc. said it is closing a locomotive plant in London, Ont., which employs about 450 people, after failing to get workers to agree to wage cuts of almost 50 per cent.
Imperial Oil Ltd., meantime, is proceeding with a $2-billion expansion to its Cold Lake oil sands operation in northeastern Alberta, a move which will create hundreds of new jobs, as the company aims to double production.
The strong dollar isn’t helping the job situation Central Canada. The Canadian dollar hit a three-month high Friday, a surge which will further pressure margins of exporters, many of whom are based in Ontario and Quebec. In Ontario, the number of unemployed jumped nearly 29,000, and the unemployment rate surged to 8.1 per cent from 7.7 in December.
Monthly jobs numbers bounce around, but several long-term trends have emerged in recent months. Job growth, which started 2011 with strength, petered out in the last half of the year, and that lacklustre pace continues. In January, employers added just 2,300 positions as part-time gains offset full-time losses, Statistics Canada said.
Employment rose once again among women aged 55 and over last month. This group has seen the biggest percentage gains in job growth of any demographic group over the past year.
Young people are having a tougher time – employment among those aged 15 to 24 fell for the fourth month in a row. Youth employment is 31,000 below its level of January, 2011, and the jobless rate jumped to 14.5 per cent last month from 14.1 per cent.
By sector, professional, scientific and technical services, along with construction, tallied losses. Employment in the so-called FIRE category – the finance, insurance and real estate sector – has seen dramatic declines, tumbling for the fifth straight month including 23,000 jobs in January. Job levels in this industry have fallen 4.6 per cent from last year.
All told, 1.42 million Canadians were unemployed last month, up from 1.4 million in December.
The tepid jobs data wasn’t the only soft economic data this week: a report Tuesday showed the country’s gross domestic product contracted 0.1 per cent in November.
There are several encouraging signs though, said Jonathan Basile, director of economics at Credit Suisse in New York. The private sector has added jobs for three months in a row, more people are looking for work (meaning they’re not giving up), and 11 of 16 industries did increase employment.
Most importantly, the U.S. economy is looking up – as Friday’s jobs numbers highlight – heartening news both for its Canadian trading partners and for global confidence.
“Canada was disappointing today, but there’s probably better news to come down the line,” Mr. Basile said.
With files from reporters Carrie Tait in Calgary and Greg Keenan in Toronto.