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Labour Force Survey Analysis – February 2016

Overall labour market weakness continues in spite of manufacturing gains

Canadian Labour Market

The Canadian labour market appears to be stalled as the economy struggles to gain traction early in 2016. For the fourth consecutive month, Canada posted decidedly listless jobs numbers. Overall employment fell by 2,300 positions in February - the second month in a row where jobs losses were effectively rounding errors compared to the 1.8 million Canadians employed across the country. That marginal decrease was enough, however, to once again push the unemployment rate up one tenth of one per cent higher, to 7.3 per cent.

employment in canada chart image

While overall jobs numbers were essentially flat, the underlying numbers are somewhat more concerning. February saw a significant loss of full-time jobs almost perfectly offset by increases in part-time work. In total, there were 51,800 full-time jobs lost in February, balanced against 49,500 new part-time positions.

full time job losses chart image

At the provincial level, February was an interesting month. Except for Alberta and BC, every province that saw an increase in employment was bordered on both sides by provinces that saw job losses (and vice versa). By far the largest gains were in BC, where the province has been enjoying something of an economic boom in recent months. There were 14,100 new jobs created in BC in February, representing an increase of 0.6 per cent over January and of 2.8 per cent compared to a year earlier. No other province comes close to BC's recent job-creation performance.

Manitoba and Newfoundland and Labrador also enjoyed a modest uptick in employment, with gains of 0.3 per cent and 0.5 per cent, respectively. Even struggling Alberta was able to eke out small jobs gains, adding 1,400 new positions in February. That increase put an end to a streak of four consecutive months of job losses in Alberta.

The offsetting jobs losses were concentrated in Ontario and Saskatchewan. On a raw numbers basis, Ontario posted the larger decline, with 11,200 fewer jobs in February - a decrease of 0.2 per cent compared to the previous month. However, Saskatchewan's job losses were not much smaller considering the vast difference in population numbers between the two provinces. Saskatchewan lost 7,800 jobs in February - a decrease of 1.4 per cent in a single month.

On an industry basis, the story in February was the exact opposite of January. Last month, job losses were concentrated in goods-producing industries and were largely offset by more service-sector employment. The reverse was true in February. There were 44,500 fewer services sector positions last month. Losses were steepest in health care and social assistance (19,600 fewer jobs) and educational services (16,900). Meanwhile, goods producers added 42,200 new positions in February, led by a surge in construction activity; there were 34,000 new construction jobs last month compared to January.

employment growth by sector chart image

 

Manufacturing Sector Labour Market

For its part, February was a solid rebound month for manufacturing in Canada. Manufacturing employment had surged in the fourth quarter of 2015, but began the New Year on a weak note, with employment dropping by 11,000 positions (all in Alberta). In February, manufacturing businesses recovered most of those losses, adding 7,600 net new jobs across the country. Those gains were not enough, however, to accommodate the increase in people looking for work in manufacturing in February. As a result the sector's unemployment rate rose from 4.7 per cent in January to 4.8 per cent last month.

manufacturing employment chart image

Although Ontario posted overall job losses last month, it was not because of flagging manufacturing activity. The province's manufacturers added 10,700 new jobs in February, marking the fourth gain in the past five months. There have been 31,200 net new manufacturing jobs created in Ontario since September.

Outside of Ontario, the situation was less positive. There were healthy employment gains in PEI - 400 new jobs in Canada's smallest province adds up to a 6.5 per cent increase in a single month - and Quebec also posted a modest increase of 3,400 net new positions. Elsewhere, the numbers were all negative. On a percentage basis, the largest decline was in New Brunswick, where manufacturing employment fell by 5.9 per cent. Saskatchewan's manufacturers also shed 3.8 per cent of their workforce last month.

manufacturing growth chart image

The good news for manufacturers is that, although it is still early days, employment levels are tracking well above 2015 levels. There were an average of 29,200 more manufacturing jobs in Canada through February compared to the first two months of last year - an increase of 1.7 per cent.

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