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Labour Force Survey Analysis –  March 2017

Surge in manufacturing employment drives job gains in March


Canadian Labour Market

The Canadian labour market turned in a second consecutive tepid performance in March, in spite of strong growth in manufacturing and a few other sectors. In total, there were 19,400 net new jobs created in March, a modest improvement over the 15,300 positions added in February, but still a far cry from the 46,000+ new jobs in each of the previous two months.

employment Cda chart

Although employment did grow by about 0.1 per cent, it was not enough to absorb all the new entrants into the labour force. Because of an uptick in the participation rate, the unemployment rate rose by a single basis point, climbing to 6.7 per cent in March.

As in February, the good news in March was that job gains were heavily concentrated in full-time positions. Nearly 95 per cent of all new jobs were for full-time workers, while part-time employment increased by just 1,000 jobs.

job gains full-time chart

The biggest bright spot provincially in March was in Alberta where the struggling economy appears to be turning the corner. That province added 20,400 new jobs last month (an increase of 0.9 per cent), bringing total employment up to its highest level in a year. It was also a good month in Nova Scotia, where employment grew by 1.0 per cent (4,600 net new positions).

Alberta stats chart

Gains in those provinces were partially offset by a modest decline in Ontario, where 11,200 jobs were lost - a decrease of 0.2 per cent compared to February. Saskatchewan and PEI also posted relatively large job losses, although in both cases those declines came after unusual spikes in February.

At the industry level, job gains were heavily concentrated in three main sectors: manufacturing, wholesale and retail trade, and business services industries. Those three groupings together added 59,500 positions in March. There were also smaller gains in construction and in information, cultural and recreation services industries.

On the whole, however, there was general weakness in services sector job creation in March. While manufacturing drove job gains on the goods side, there were net 2,400 fewer services sector positions that month. Losses were relatively widespread, but led by transportation and warehousing, health care, and education.

employment growth by sector

Manufacturing Sector Labour Market
The manufacturing sector turned in a surprisingly strong performance in March. After a more-or-less steady decline in manufacturing jobs since late 2015, the sector suddenly added 24,400 new positions last month - an increase of nearly 1.5 per cent compared to February. Any dramatic month-over-month change should always be interpreted with caution, but it is worth noting that this total represents the biggest single-month jump in manufacturing employment in Canada in 15 years.

In spite of that increase, manufacturing employment is still tracking behind 2016 levels. On average, there were 29,000 fewer manufacturing jobs in Canada in the first quarter of 2017 compared to the same period last year.

mfg employment in Cda

Job gains in manufacturing were almost entirely driven by two provinces: Ontario and Alberta. Ontario added 13,000 new manufacturing positions in March, bringing sector-wide employment up to 765,800 - its highest level since May 2013. After a flat performance through most of 2016, Ontario has created more than 21,000 manufacturing jobs since November.

mfg employment growth March chart

For its part, the addition of 5,000 manufacturing jobs in Alberta represents the beginning of a turnaround for a sector that has struggled mightily in the face of lower oil prices. As the energy sector begins to gear up (in a relative sense), demand for manufactured goods is beginning to rise, prompting many Alberta businesses to re-hire workers that had been previously laid off. Although manufacturing employment rose by 4.6 per cent in March, the average number of manufacturing jobs in the province in the first quarter of 2017 is still more than 11 per cent lower compared to the same quarter in 2016.

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