Canada’s labour market has finally perked up after half a year in the doldrums as a commodities boom and a firmer U.S. economy give employers the confidence to hire.
The economy churned out 82,300 jobs last month, the most since 2008, with many of the positions created in full-time work. The hiring spree sent the country’s jobless rate down two notches to 7.2 per cent in March, matching the lowest rate seen in the recovery.
Both full-time employment and private-sector employment are running at record highs, and nowhere is the labour market hotter than in Saskatchewan, where a 4.8-per-cent jobless rate is the lowest in the country.
It’s too early to say whether the numbers reflect a sustained turnaround in the jobs market or a one-month blip, but most economists don’t expect the pace of growth in March to last.
The statistics come amid examples that businesses are growing bolder. In Central Canada, Toyota Motor Corp. just announced it will hire 400 workers at its Woodstock, Ont., plant, spurred by better prospects in Canada and the United States. Employers in Alberta, Saskatchewan and Newfoundland are fretting about labour shortages. Factories have added jobs for four months in a row and the natural resources sector continues to lead employment growth.
The jobs report from Statistics Canada Thursday shows “the glacial pace of hiring in Canada is thawing, and that the economic outlook in Canada is brightening,” said Emanuella Enenajor, economist at CIBC World Markets.
The six-month average shows the pace of hiring is 7,500 a month, so while sentiment might be improving, “the soft backdrop of overall employment growth means we’ll need a few more months of robust numbers to be convinced of a more entrenched revival,” the economist said.
Recent surveys on the economy – from the Canadian Federation of Independent Business, the Canadian Institute of Chartered Accountants and the Conference Board of Canada – all point to a brighter mood as optimism grows about the Canadian and U.S. economies and worries ease over Europe.
The job gains, at nearly eight times economists’ estimates, were broad-based as the health care, information and culture, and public administration sectors added to the head count, Statistics Canada said.
Even the manufacturing sector is looking up. Gary Nuttall, president of Ontario’s Gray Tools Canada Inc., which makes wrenches and screwdrivers, says business is still bumpy but the trend is improving.
The chief reason? Resources.
“Across Canada, there a number of major projects that are giving a major impetus to manufacturing in the country,” Mr. Nuttall said, citing gold mines in northern Ontario, oil sands expansion in Alberta and the Hebron oil field in Newfoundland as examples.
Nowhere is the labour market stronger than in Saskatchewan, where a potash, oil and uranium boom is driving hiring. Regina’s rate, at 3.9 per cent, is the lowest among cities.
The picture isn’t improving everywhere. New Brunswick shed 6,600 jobs last month, the sharpest drop for the province in almost six years, according to Toronto-Dominion Bank. Job levels are now below year-earlier levels. And the public sector is set for thousands of pink slips as the federal and some provincial governments cut spending.
While many economists have boosted growth forecasts for Canada this year, some are skeptical about the outsized job gains last month. Quebec’s numbers, in particular, have seen huge swings in recent months.
“There is certainly a case to be made for Statistics Canada to investigate and explain the reasons for the extreme volatility of provincial data at this point in the economic cycle,” said Stéfane Marion, chief economist at National Bank Financial, given that it is “a crucial time for both fiscal and monetary policymaking in Canada.”