Production Associates inspect cars moving along assembly line at Honda manufacturing plant in Alliston, Ont., March 30, 2015.Fred Thornhill/Reuters
A stronger manufacturing sector, led by strong auto sales and exports, was one of the main drivers behind Ontario's surprise May employment numbers.
The sector added 21,500 jobs last month, a 1.3-per-cent increase from April, according to Statistics Canada's May Labour Force Report, released on Friday. Nearly 16,000 of those jobs were created in Ontario, a 2.1-per-cent increase from last month.
Manufacturing makes up for 1.7 million jobs across Canada, with about 45 per cent located in Ontario.
Craig Wright, senior vice-president and chief economist at Royal Bank of Canada, said the largest subsector in the province has a hand in this growth. "We've seen the auto sector continue to be fairly strong with fairly robust numbers in auto sales in both the U.S. and Canada," he said.
Mr. Wright added that a combination of other factors, including U.S. growth accelerating and the Canadian dollar being more competitive, has helped to bring up the manufacturing numbers.
This includes getting past temporary factors, including auto-plant retooling, poor weather conditions on both sides of the border and a West Coast port strike that hampered production and challenged exports in the first quarter of the year.
Despite these factors, exports in general continued to operate at high levels, according to an RBC report on Ontario's economic outlook for June.
The report spotlights an increase of 9.4 per cent in nominal merchandise exports, with growth in industrial machinery, electrical and electronic products, and consumer goods going south of the border.
"The U.S. economy continues to strengthen," said Mathew Wilson, vice-president of national policy at Canadian Manufacturers and Exporters. "The auto markets are doing really well in the U.S., which is the main manufacturing base in Ontario."
It's a trend this month, across the provinces at least. Quebec, which historically has the second-largest number of manufacturing jobs, added 2,200 in May. British Columbia, with the third-largest, added 2,600.
"Manufacturers are at a spot in Canada in general where they're getting close to peak capacity, and the sales continue to go up," Mr. Wilson said.
"We're expecting, as the U.S. economy rebounds or continues to strengthen, the Canadian economy will rebound as well and the manufacturing sector will be a major part of that growth going forward."
However, some economists caution against placing too much emphasis on numbers from a single month, and are taking a wait-and-see attitude on whether the export expectations pull through.
"I recognize that 16,000 is a big gain, but it makes more sense to look at the trend year-to-date," said Sébastien Lavoie, assistant chief economist at Laurentian Bank Securities. "We're all pleased with the numbers, especially with the quality of jobs being added, and that's what should be taken from it."