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Labour Force Survey Analysis – July 2017

Job growth slows in July, despite continued strength in manufacturing

Employment growth in Canada slowed to a crawl in July, although growth remained positive thanks in large part to another strong showing in the manufacturing sector and in Ontario generally. While the Canadian economy added just 11,000 net new jobs in July (an increase of less than 0.1 per cent), it is important to remember that those modest gains come off the heels of strong growth in May and June, when nearly 100,000 positions were added.

Thanks in part to a decline in the number of Canadians actively looking for work, that small increase in employment was enough to drive the unemployment rate down from 6.5 per cent in June to 6.3 per cent last month. Canada’s unemployment rate is now sitting at its lowest level since October 2008.

Although overall job growth was modest in July, there was some underlying good news: there was strong growth in full-time employment, offsetting a decline in part-time work. There were 35,100 net new full-time jobs created in July, compared to a loss of 24,300 part time positions. 

A long-awaited recovery in the Canadian economy has finally reinvigorated domestic job markets after years of poor growth. Through the first seven months of 2017, total employment is 1.7 per cent higher compared to the same period last year. That puts Canada on pace for its best year of job creation since 2008.

At the provincial level, results were mixed. On the positive side, Ontario enjoyed strong job growth, adding 25,500 net new positions in July – an increase of about 0.4 per cent. Manitoba also had a good month, creating 4,800 jobs (up 0.7 per cent). However, those gains were muted by significant declines in Alberta, where 14,400 jobs were lost. Employment was also lower in BC and in Newfoundland and Labrador.

            

Overall job growth across Canada was dampened by a significant drop in education employment. The number of education jobs in the country fell by 2.5 per cent in July – a loss of 32,000 positions, with Ontario, Quebec and Alberta all posting large declines. The reason for these losses is unclear. Since jobs numbers are seasonally adjusted, summer vacation should have no effect on education employment. Neither was there a strike or lockout in any of those provinces.

In addition to education, there were also declines in agriculture employment (10,000 fewer jobs), as well as in the public service (10,300 fewer positions). Construction activity was also down, with 9,100 fewer jobs available.

Those losses were offset by gains in three specific industries. Leading the way was wholesale and retail trade, where employment rose by 0.8 per cent (21,900 net new positions). There were also notable gains in information, culture and recreation industries (18,300 jobs) and in manufacturing (13,700 positions created).

Manufacturing Sector Labour Market

The creation of 13,700 new jobs in manufacturing continues a trend of resurgent employment in the sector in 2017. After more or less steady declines from December 2015 through to February 2017, there has been a remarkable turnaround over the last five months. Since February, 65,700 new manufacturing jobs have been created across Canada, bringing total employment in the sector from a low of 1.68 million jobs to 1.74 million. Manufacturing employment in Canada is now at its highest level in four-and-a-half years. 

Whereas last month it was BC that drove manufacturing job gains, it was Quebec that stole the show in July. That province added 14,200 new manufacturing positions last month – an increase of 2.9 per cent compared to June. The increase is a welcome reversal of recent manufacturing employment trends in that province, where the number of manufacturing jobs had been steadily declining over the last 18 months. In addition to Quebec, manufacturing employment was also higher in BC (1,500 new jobs) and New Brunswick (1,300 positions), with smaller gains in Manitoba and Saskatchewan.

In Ontario, manufacturing employment dipped slightly, with 5,000 jobs lost in July. There were also fewer manufacturing jobs in the Maritimes and in Alberta last month.

For the year to date, however, it is Saskatchewan that is emerging as Canada’s manufacturing job growth champion. Thanks in large part to a surge in January and February, manufacturing employment in that province is tracking nearly 12 per cent higher than it was through the first seven months of 2016. Meanwhile, 2017 is proving to be a rough year in Newfoundland and Labrador, where manufacturing employment is down nearly 17 per cent compared to last year.

 

 

 

 

 

 

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