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Labour Force Survey Analysis – May 2017

Employment surges ahead on full-time job creation, manufacturing growth

After a flat performance in April, the Canadian labour market roared back to life in May, driven by exceptional full-time job gains, young Canadians, and a strong showing in the manufacturing sector. Overall, the Canadian economy added 54,500 net new jobs last month – an increase of about 0.3 per cent compared to April. That growth represents about 17,000 more jobs than were created in the previous three months combined.

In spite of the increase in employment, the jobless rate across Canada rose by one basis point, from 6.5 per cent in April to 6.6 per cent in May. That increase was largely due to a surge in the number of young Canadians looking for work as the school year ended in most post-secondary institutions. The good news is that most of those students were successful in their search; youth employment jumped by more than 1.1 per cent compared to April.

Adding to the good news, the job gains in May were entirely in full-time positions. In fact, Canada added 77,000 full-time jobs last month, while there were 22,300 fewer Canadians in part-time work.

Shifts in the nature of employment across the country represent another in a growing list of indicators pointing to a strengthening Canadian economy. Employment growth was tepid at best through most of 2016 and whatever job gains there were tended to be in part-time positions. However, the number of part-time jobs peaked in January and has been on a downward trend since. Meanwhile, full-time employment growth has begun to accelerate.

Although job gains were concentrated in Canada’s three largest provinces, every province with the exception of Newfoundland and Labrador saw higher employment in May. Ontario gained 19,900 net new jobs (an increase of 0.3 per cent), while Quebec added 14,900 jobs (0.4 per cent) and BC, 12,300 (0.5 per cent). PEI, Manitoba and Saskatchewan also posted healthy gains.

In spite of strong overall jobs numbers, results at the industry level were mixed; five sectors were responsible for nearly all the growth in May, offsetting declines elsewhere. The number of jobs in professional, scientific and technical services industries rose by 25,900 net positions, while there were a similar number of jobs added in manufacturing. Employment in transportation and warehousing industries was up by about 17,100 positions, while wholesale and retail trade, and health care and social services, added about 15,000 jobs each.

These gains were tempered by declines in finance, insurance and related industries (17,400 jobs lost), as well as information, culture and recreation (15,800 jobs). There were also 12,300 fewer public sector jobs in May.

Manufacturing Sector Labour Market

As noted above, May was an excellent month for employment in manufacturing as the sector created 25,300 net new positions across the country compared to April. That increase of about 1.5 per cent is part of a remarkable turnaround in manufacturing where as recently as February, employment was sitting at 40- or 50-year lows.  Since February, the manufacturing sector has added over 49,000 new jobs and employment is now at its highest level since February 2016.

Manufacturing job gains were heavily concentrated in Ontario. With the addition of more than 14,000 positions (a 1.9 per cent increase), manufacturing employment in the province hit a four-year high in May. It was a different story next door, however, as Quebec manufacturers have been struggling to maintain their workforce over the last six months. Since November, Quebec has lost 8,500 manufacturing jobs.

Although Ontario created the largest number of manufacturing jobs in May, by far the largest growth was in Atlantic Canada, where all four provinces posted remarkable gains. The worst of the group – New Brunswick – saw manufacturing employment jump by 2.3 per cent compared to April. In PEI and Nova Scotia, employment was up by 6.3 per cent and 8.4 per cent, respectively. And after falling almost continuously for the last two years, the number of manufacturing jobs in Newfoundland and Labrador jumped by more than 16 per cent in May. That spike may be related to final construction work on the Hebron offshore oil platform. 

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