Labour market flat in April as jobs in manufacturing switch to wholesale trade

Canadian Labour Market

After posting solid gains in March, Canada’s job market was essentially flat in April. Overall, there were 2,100 net jobs lost, as declines in manufacturing were offset by parallel gains in wholesale trade. With no significant job movements to speak of, the unemployment rate remained unchanged for at 7.1 per cent.

April’s job losses were entirely in full-time positions, although there was very little real change in either part-time or full-time work. All told, there were 2,400 fewer full-time jobs across Canada last month, while about 400 part-time jobs were created.


After recent poor export and GDP numbers, this jobs report adds further evidence in support of the view that the Canadian economy is not performing well in early 2016. Through four months, employment is just 0.7 per cent higher than it was over the same period in 2015.

Much of the weakness in April can be pinned on the struggling Alberta economy. A spike in the number of jobs in that province in March proved to be temporary as 20,800 jobs were lost in April, bringing overall employment levels in Alberta back to about February levels. There were also modest job losses in Saskatchewan, Manitoba and Ontario last month.

Meanwhile, BC continues to flex its economic muscles, adding 13,000 new jobs in April. So far in 2016, employment in BC is tracking 3.3 per cent above last year’s levels. No other province comes close to matching BC’s current strength.

In addition to BC, there were solid job gains in Newfoundland and Labrador, as well as New Brunswick in April. Canada’s easternmost province added 6,100 jobs (a 2.6 per cent gain) to bring employment to its highest level since August. New Brunswick, meanwhile, saw employment grow for the first time in four months.


On an industry basis, there were once again dismal jobs numbers coming out of the manufacturing sector, although there is mounting evidence that these represent a measurement issue rather than actual job losses (see below). In terms of the reported numbers, the winners in April were retail and wholesale trade which added 26,800 jobs, and accommodation and food services where 21,900 net new positions were created. Offsetting those gains were losses in manufacturing (16,500 jobs) and business and other support services (16,000 jobs).

Manufacturing Sector Labour Market

For the second month in a row, manufacturing employment fell sharply in April. Since February, there have been reported losses of 48,300 manufacturing jobs across the country. In just two months, manufacturing employment has gone from a 3-year high to the lowest levels in at least 30 years.

However, there are reasons to believe that the numbers coming out of the manufacturing sector may not entirely represent actual job losses as much as measurement or survey-related issues. For one, the decline in manufacturing employment has been matched by a parallel drop in the size of the manufacturing labour force. In other words, even though Canada has lost 48,300 manufacturing jobs in just two months, the number of unemployed Canadians in manufacturing has not gone up at all. In fact, it has fallen from 94,900 in December to 89,300 in April.


This begs the question: where did all those people go? One strong possibility is that they have been reclassified to another sector of the Canadian economy – in this case, wholesale trade. According to Statistics Canada, the Labour Force Survey classifies employment by industry based on the “general nature of the business carried out in the establishment where the person worked.” However, many companies that are clearly in the business of manufacturing outsource some or all of their physical production activities to other countries, retaining the marketing, design, research, logistics, after-sale services and other components of their business here in Canada. As a result, the nature of their activities in Canada may classify them out of the manufacturing sector.

This appears to be the case with April’s jobs numbers. The dramatic decline in the manufacturing labour force and employment levels was matched by a similar increase in wholesale trade. Not only did wholesale trade spike upwards, so too did the size of the labour force in that sector. The result is that even though there were 18,600 new jobs in wholesale trade in April, the number of unemployed people in that sector also increased by 2,700.


Adding to the evidence that the jobs losses in manufacturing may not be real is the fact that there is no obvious provincial driver pushing employment down. With the exceptions of Newfoundland and Labrador and Saskatchewan, all provinces posted losses and none were unusually dramatic.

A final issue worth noting is that there appears to be some inconsistency with national versus provincial-level data. While Canada as a whole lost 16,500 manufacturing jobs in April, the sum total of losses across the provinces was only 12,800 (the remainder cannot be attributed to the territories as they are not included in other labour force survey data).