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A woman walks by employment agency Manpower Canada in Toronto April 25, 2012. Employers are slightly more optimistic about adding to their head count, Manpower Inc.’s quarterly survey shows.Michelle Siu/The Globe and Mail

Canadian employers expect modest hiring at the start of next year, though a cloudy economic outlook means many are more apt to hire on a temporary rather than permanent basis.

Employers are slightly more optimistic about adding to their head count, Manpower Inc.'s quarterly survey shows. Its seasonally adjusted net employment outlook, to be released Tuesday, rose to 13 per cent from the previous quarter's 11 per cent.

Last month, Canada's labour market showed surprisingly strong job creation, with 59,300 new positions. The gains, largely in services such as food and retail, contrast with a slowdown in economic growth.

With mixed signals in the economy, "the mood is cautious," said Byrne Luft, Manpower's vice-president of operations, adding the agency is seeing stronger demand in its contingent labour division, which illustrates the wavering confidence.

"There are some suggestions of slow growth in the Canadian economy in 2013 … The housing market is cooling, that does spill over to employment."

The survey is based on responses from more than 1,900 employers. It found 13 per cent plan to boost payrolls in the first quarter of next year and 7 per cent see cutbacks. Two per cent are unsure and 78 per cent expect to maintain current staffing levels.

There are growing signs of a mismatch in the labour market between the skills jobs seekers have and those needed by employers, Mr. Luft said.

"This is becoming a real concern in this economy – a large number of people are unemployed but they don't have skills to fill the vacancies" in professions such as skilled trades, technicians and engineers, he said.

As a result, more employers are looking outside Canada's borders to hire workers, he said. And more Canadian job seekers are willing to move for work.

The first-quarter outlook remains one percentage point below levels of the same quarter last year. Transportation and utilities are the most upbeat for the January-to-March period, while manufacturers of non-durables goods are the least optimistic.

By region, confidence is still highest in the West. Employers in Atlantic provinces are also optimistic, while those in Quebec are the most pessimistic.

By city, Brampton, Ont., has the rosiest outlook for hiring, while Victoria has the bleakest on a seasonally adjusted basis.