Canada continues to create jobs at a steady pace, but shifts below the surface show factory employment tumbling to near-record lows while food-service firms and the health-care sector boost payrolls.
Employers added 13,200 jobs last month, similar to the pace of much of this year, as public-sector hiring offset losses at private companies. The unemployment rate remained at 6.9 per cent, its lowest level in nearly five years, as job gains matched labour force growth.
Modest job growth mirrors a soft economy. The Bank of Canada last month cut its economic outlook for this year and next, citing weakness in exports and business investment. This week, the government of Ontario also cut its near-term forecast amid weak exports.
Job creation would remain “fairly weak” in the coming months given slow economic growth, said Benoît Durocher, senior economist at Desjardins, which he believes will push the jobless rate higher.
Little change at the aggregate level masks churn underneath. The construction and manufacturing industries shed jobs for the second straight month, while the services side of the economy – led by accommodation and food services along with health care – expanded headcount.
Wages for permanent workers rose 1.7 per cent from a year earlier, Statistics Canada said, showing “the job market is not hot enough to create notable wage pressures,” said Leslie Preston, economist at Toronto-Dominion Bank.
Many job gains have occurred in lower-paying sectors, with losses in higher-wage ones. Workers in accommodation and food services earn on average $364.18 a week, while those in manufacturing earn $1,030.45, above the national average, according to Statistics Canada’s separately released payrolls data.
Public-sector employment rose by 47,300, with gains in the health-care and education sectors. The private sector shed 22,100 jobs and self employment shrank by 12,000.
The Prairies are still home to Canada’s hottest jobs market. Saskatchewan has the country’s lowest jobless rate, at 3.6 per cent. Newfoundland and Labrador has the highest at 11 per cent. By city, Regina has the lowest jobless rate, at 3.2 per cent, while its most elevated in Saint John at 9.4 per cent.
“The West continues to drive so much of our employment growth,” said Kelly Dixon, president of Workopolis, Canada’s largest online jobs site, adding that many companies in Saskatchewan and Alberta are “trying to advertise more into Ontario, Quebec and the Maritimes” to lure workers.
Its analysis shows workers from provinces in Atlantic Canada are far more likely to search for jobs outside their provinces than in Ontario, where online job seekers are still concentrated on their home province.
Competitive pressures and tepid demand prompted factories to cut another 6,400 jobs, bringing total losses over the past year to 82,500 or 4.6 per cent, the biggest percentage drop of any sector. The level of manufacturing employment has fallen to its second-lowest level since record-keeping began in 1976.
Nearly half of all job growth in the past four years came in just two sectors: health care and construction, according to the Conference Board of Canada. Health care has seen consistent gains, in sync with an aging population, while construction is linked with stimulus spending and a housing boom. Manufacturing and public admin employment has contracted since July, 2009.
Some private-sector firms are shifting into layoff mode. BlackBerry is in the midst of shedding thousands of jobs, while Penn West Petroleum, Rogers, Sears Canada and Encana have all announced workforce reductions.
Last month’s labour market was better for women and tougher for men. The jobless rate for adult women dropped to 5.2 per cent in October from 5.6 per cent, though climbed to 6.3 per cent from 6.2 per cent for men 25 and older.
While the national unemployment rate has fallen, it stems mostly from fewer people seeking work, and remains one percentage point higher than in early 2008.
The broadest measure of unemployment – which includes discouraged workers and those in part-time positions who would prefer full time – has improved from last year’s levels. Statscan’s “R8” jobless rate was 9 per cent in October, compared with 9.3 per cent a year earlier.