Overall labour market strengthens while the reported number of manufacturing jobs plunges

Overall labour market strengthens while the reported number of manufacturing jobs plunges


Canadian Labour Market


Canada’s job market exceeded expectations in March, posting its first significant gains since October. All told, the Canadian economy created 40,600 net new jobs – an increase of about 0.2 per cent over February. The increase was enough to drive the unemployment rate down from 7.3 per cent to 7.1 per cent.



Significantly, most of the new jobs in March were in full-time positions. This represents a marked change from the past several months when the only openings available seemed to be in part-time work. From August through February, Canada lost nearly 70,000 full-time jobs across the country, while creating more than 100,000 part-time positions. While one month does not a trend make, March’s employment numbers saw the first real improvement in full-time job opportunities, with net 35,300 new positions opening up.



Although the numbers in March were generally solid, there is still a long ways to go before Canada’s labour market can be considered truly healthy. Employment in the first quarter of 2016 was just 0.7 per cent higher than a year earlier – far lower than what was needed to absorb the new entrants into the labour market over that period.

At the provincial level, there were positive numbers in most provinces, led by beleaguered Alberta which created 18,900 net new jobs – the province’s best monthly performance in more than two years. Even with that increase, however, there are still nearly 15,000 fewer jobs in Alberta than there were in September.

While Alberta created more jobs than any other province, Manitoba saw the fastest overall growth in March, at 0.9 per cent. Nova Scotia and Saskatchewan also had strong months, while BC and Ontario posted smaller gains. There were modest job losses elsewhere.

On an industry basis, gains were concentrated in the services sector, which added 74,700 positions. Leading the way was health care and social assistance (24,900 net new jobs), accommodation and food services (17,700) and professional, scientific and technical (PST) services (12,200). Health care and PST services have been the country’s biggest job creators recently, with employment growth of 3.4 per cent and 3.2 per cent respectively over the past 12 months.

Offsetting those gains was a dramatic slide in the reported number of manufacturing jobs (discussed below).


Manufacturing Sector Labour Market

March was a dismal month for reported jobs numbers in manufacturing. The Labour Force Survey stated that nearly 32,000 positions had been lost, making March the worst month for manufacturing employment since the 2008-2009 recession.

March’s numbers belie a recent trend of steady growth in manufacturing employment. From September through December, the sector had added 25,400 jobs and held more or less steady in January and February.


While there are a number of factors that may have contributed to lower employment in March, nothing points to a decline of that magnitude. This suggests that there may be measurement or survey-related issues that created a one-month aberration in the reported numbers. As noted above, one month does not a trend make. Whenever unusually high or unusually low figures appear in survey data, it is useful to resist popping the champagne or jumping off a cliff until more evidence has accumulated.

In terms of the reported numbers, manufacturing job losses were concentrated in Ontario, Quebec and Alberta. Ontario lost 9,700 positions, effectively eliminating February’s gains in that province. Quebec’s loss of 8,700 jobs also negates its solid growth over the past two months.

Alberta’s manufacturing job losses are the most easily explained as sharp cuts to capital spending budgets in the energy sector have caused demand for manufactured goods in the supply chain to dry up. Businesses are filling the last of their orders and have nothing new coming in. Even so, the jobs numbers are severe. Data suggests that Alberta lost 7,900 manufacturing jobs in March, a decline of 6.8 per cent in just one month. That brings total manufacturing job losses in the province to 21,900 since November. Presently, there are 117,500 Albertan reported to have a job in manufacturing. That is the lowest number in nearly 20 years.


The lone bright spots in March were in Nova Scotia and New Brunswick which together added 1,500 net new manufacturing jobs.

This jobs report adds special significance to next month’s release. A rebound would suggest that March was simply a statistical deviation. Sustained lower employment would raise a host of other concerns.