Labour Force Survey Analysis –  June 2016

Losses in Quebec keep overall job growth flat in June

Canadian Labour Market

Canadian labour markets were once again flat in June, as job losses in Quebec and, to a lesser extent, Ontario offset gains elsewhere in the country. Overall, the Canadian economy lost 700 net jobs for the month - amounting to little more than a rounding error compared to the 18.1 million employed across the country.

employment in canada

With half of the year already in the books, it appears that 2016 will be yet another year of lacklustre jobs growth in Canada. Through six months, employment is only about 0.7 per cent higher than it was through the same period in 2015. This growth rate is far below what is needed to absorb the increase in the working-age population, which is expanding at a 1.1 per cent clip this year.

Nevertheless, the unemployment rate in Canada is on a downward trend, dropping from 7.3 per cent in February to 6.9 per cent in May and 6.8 per cent in June. A lower unemployment rate is usually seen as good news, but that is not the case here. The decline is entirely the result of more Canadians giving up their job searches; the unemployment rate only counts those Canadians actively looking for work. In June, 65.5 per cent of the working age population was either employed or looking for employment. That is the lowest level since 1993.

Also concerning is the fact that June's flat employment totals masked a marked drop in the number of full-time jobs across the country. There were more than 40,000 fewer full-time positions in June, offset by a nearly identical increase in the number of part-time positions.

Job losses in June were concentrated in Quebec and Ontario, as both provinces gave back some of their gains in May. Quebec lost 11,200 net jobs last month, while Ontario dropped a comparatively modest 4,200 positions. There were also lower overall jobs numbers in Alberta and Newfoundland and Labrador.

On the positive side, June was an excellent month on the Pacific coast, as BC added 16,000 net new positions, mostly in tourism and professional services industries. Employment was also higher in Nova Scotia and New Brunswick.

At the industry level, the story in June was one of job losses in goods-producing industries offset by gains in services. Goods sector employment fell by 46,200 jobs last month, led by a sharp drop in construction activity (-28,700) and a smaller decline in manufacturing (-12,900).

Meanwhile, 45,500 jobs were created in the services sector, led by tourism and recreation-based industries. The accommodation and food services sector added 20,200 jobs in June, while information, culture and recreation industries created 14,100 net new jobs.

Manufacturing Sector Labour Market

Last month it was reported that, after reaching a 3-year high in January, manufacturing employment suddenly plunged to its lowest level since before 1976 - all June was another disappointing month on the jobs front for Canadian manufacturers. As noted above, manufacturing employment fell by 12,900 net positions in June, more than offsetting May's increase of 12,200 jobs.

Halfway through 2016, manufacturing employment is essentially flat compared to the same period last year. However, this is largely the result of dramatic declines in Alberta offsetting gains elsewhere. Through six months, manufacturing employment in Alberta is down nearly 15.8 per cent compared to the same period in 2015 - a loss of more than 22,000 jobs. Outside Alberta, Canada has added 21,700 manufacturing jobs so far this year - an increase of 1.4 per cent compared to the first half of 2015.



Once again, some inconsistencies remain in the manufacturing data, although the problem is not as bad as in past months. While national manufacturing employment fell by 12,900 positions, job losses across the ten provinces only totalled 9,000 (the territories are not included in most Labour Force Survey data).

As with the overall jobs numbers, the decline in manufacturing employment was concentrated in Ontario and Quebec. There were 9,000 fewer manufacturing jobs in Ontario in June compared to the previous month (a 1.2 per cent decline), while there were 5,600 fewer positions in Quebec (a 1.1 per cent decline). In the case of Quebec, however, June's decline follows an unusually high surge in May, meaning that the overall employment trend in that province is positive.

Meanwhile, Alberta manufacturers received some welcome news as 4,200 new jobs were created in June. BC also gained back 2,400 manufacturing jobs after losing 9,200 the previous month.

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