Skip to Content

Sites

Free Digital Bid Board

Free Digital Bid Board

Get promoted to GCs and organize all your project leads and bid invites in one place

Economic

In May, Canada Disappoints Once Again on the Re-Hiring Front

Alex Carrick
In May, Canada Disappoints Once Again on the Re-Hiring Front

Canada’s Labour Market Hopes on Hold

In May, for the second month in a row, total employment in Canada retreated instead of stepping forward, putting a hold on hopes for an improving labour market. The latest month-to-month decline in total jobs was -68,000, coming on the heels of April’s setback of -207,000 jobs.

In May, Canada Disappoints Once Again on the Re-Hiring Front Text Graphic

The nation’s seasonally adjusted (SA) unemployment rate in May worsened slightly to 8.2% from the prior month’s 8.1%. The not seasonally adjusted (NSA) U rate stayed flat at 7.1%.

Canada’s jobs recovery ratio  ̶  i.e., versus the big loss in employment between February and April of last year  ̶  stayed close to 80%, a level where it has hovered for the last several months.

At least, for Canadians, there’s some consolation to be found in their jobs ‘claw-back’ ratio, at 80.9%, being better than America’s, 65.9%.

The Canadian construction sector in the latest month shed -15,000 jobs, but its level of employment is up nicely, +15.9% y/y. (By way of comparison, total employment nation-wide is +12.9% y/y.)     

Furthermore, construction’s loss of jobs was less than half the decline (-36,000) recorded by the manufacturing sector. Canadian manufacturing employment is currently (i.e., as of May 2021) +12.1% y/y.

Manufacturing, though, has a better jobs claw-back ratio than construction, 90.9% to 82.9%.

The recent weakness in re-hiring isn’t helping workers maintain the kinds of large compensation increases they were being lavished with last year. For all employees, as set out in Table 3, both average weekly (-2.3%) and average hourly earnings (-1.6%) are off on a year-over-year basis.

In May, average weekly earnings for part-time work recorded the sharpest pullback, -8.1% y/y.

Graph 1: Canada: Month-to-month Total Employment Change

Cdn total employment in May 2021 was -0.4% m/m, but +12.9% y/y. The y/y change was boosted by a low 'base' effect. May 2020's COVID-impacted figure (i.e., the denominator in the % change calculation) was deeply depressed.
Latest data point is for May, 2021.
Data sources: Household Survey, Statistics Canada.
Chart: ConstructConnect.

Table 1: Monitoring the Canadian Employment Recovery ‒ May 2021

Canada's recovery ratio stayed close to 80%, a level where it has hovered for the last several months.
Data source: Statistics Canada.
Table: ConstructConnect.

Table 2: U.S. and Canadian Jobs Markets – May 2021

U.S. 'real' (after inflation) gross domestic product (GDP) contraction in 2020 vs 2019 was -3.5%. Canada's comparable GDP decline was -5.4%. The primary reason for the difference was that Canada locked down faster and tigher than the U.S. in response to COVID-19, causing a deeper output drop.
SA is seasonally adjusted / NSA is not seasonally adjusted.
U.S. labor data is from a ‘payroll survey’ / Canadian labour data is from a ‘household survey’.
Canadian NSA unemployment rate ‘R3’ is adjusted to U.S. concepts (i.e., it adopts U.S. equivalent methodology).
Data sources: U.S. Bureau of Labor Statistics (BLS) & Statistics Canada.
Table: ConstructConnect.

Table 3: Canadian Workforce Earnings
Year Over Year, May 2021

In May 2021, the number of full-time jobs was +10.0% y/y, but part-time positions soared even more, +28.1% y/y due to a low base (or low denominator in the percentage change calculation) effect.
Based on not seasonally adjusted (NSA) ‘current’ dollar data.
‘Current’ means there has been no scaling back to remove effects of inflation.
Data source: Table 11, Statistics Canada’s Labour Force Survey.
Table: ConstructConnect.

Graph 2: Manufacturing vs Construction Employment in Canada

Manufacturing has returned to its pre-pandemic jobs level; construction remains behind a little vs pre-COVID-19. In 2000, the ratio of construction to manufacturing jobs in Canada was 0.36 to 1.00. Now, it's 0.83 to 1.00.
The last data points are for May, 2021
Data source: Statistics Canada.
Chart: ConstructConnect.

Graph 3: Canada Employment in Construction vs Manufacturing

In 2000, there were 0.36 jobs in construction for every 1 job in manufacturing (i.e., manufacturing was a much bigger provider of employment). Now, there are 0.84 jobs in construction for every 1 job in manufacturing.
The last data point is for May, 2021
Data source: Statistics Canada.
Chart: ConstructConnect.

B.C.’s Workplace the Leader among Provinces

In provincial labour markets, British Columbia is the standout. Only on the West Coast is the unemployment rate (7.0%) lower than the national figure (8.2%) and the rate of y/y jobs increase (+15.1%) greater than the Canada-wide advancement (+12.9%).

Also, B.C.’s share of the national increase in jobs, year over year, at 16.2%, is higher than its slice of the country’s total population, 13.5%.

For Ontario, Quebec and Alberta, their shares of the nation-wide jobs increase y/y are in line with their population representation: Ontario, a 38.8% share for population and a 39.1% share for Canada-wide nominal jobs increase y/y; Quebec, 22.5% and 21.5%; and Alberta, 11.7% and 12.4%.

Table 4: Canada’s Provincial Labour Markets – May 2021

Ontario is currently accounting for the largest portion (39.1%) of the national year-over-year jobs increase. Quebec (21.5%) is in second spot. In third & fourth positions are B.C. (16.2%) & Alberta (12.4%).
Data Source (seasonally adjusted figures): Statistics Canada.
Table: ConstructConnect.

Graph 4: Canada’s Provincial Labour Markets – May 2021

In May 2021, British Columbia was the only province to record an unemployment rate (7.0%) lower than the total Canada figure (8.2%) and a year-over-year jobs increase (+15.1%) greater than the country-wide performance (+12.9%).
Data Source: Statistics Canada.
Chart: ConstructConnect.

Please click on the following link to download the PDF version of this article:
Economy at a Glance Vol. 17, Issues 88 and 89 – In May, Canada Disappoints Once Again on the Re-Hiring Front – PDF


Alex Carrick is Chief Economist for ConstructConnect. He has delivered presentations throughout North America on the U.S., Canadian and world construction outlooks. Mr. Carrick has been with the company since 1985. Links to his numerous articles are featured on Twitter @ConstructConnx, which has 50,000 followers.

Recent Comments

comments for this post are closed

You might also like