This is a post from Alex Carrick's blog that covers the Canadian construction industry.

Since 1985, Mr. Carrick has held the position of Canadian Chief Economist with Reed Construction Data's CanaData, the leading supplier of statistics and forecasting information for the Canadian construction industry.

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Construction Industry Forecasts

Notes from Alex Carrick - Sep 10, 2010

Alex Carrick
Canada’s construction sector added another 12,000 jobs in August

Canada’s construction sector added another 12,000 jobs in August, according to the latest labour market report from Statistics Canada. This was partly due to job-site activity heating up to complete projects before much of the infrastructure money dries up early next year. Total employment in the industry is now only 23,000 jobs below its all-time peak of November 2008.

A significant story is unfolding in the comparison of employment in construction (+7.9% year over year) versus manufacturing (-0.4% after many years below 0.0%). There are only 500,000 more jobs in manufacturing than in construction. A decade ago, the degree of separation was 1.4 million more jobs in production-line work than in the field. The convergence has been dramatic.

The loss of U.S. and Canadian manufacturing jobs may begin to abate as workers in newly emerging nations demand better pay and safer work environments, raising costs. And construction employment will take a breather over the next year as residential starts moderate and stimulus spending is cut back before private sector investment money fully returns.

Longer-term, it will be investment in resource projects that will keep Canadian construction employment growing, as demand by the rest of the world for the base metals and fuels that Canada has in abundance can only grow stronger. Commodities will pave Canada’s way ahead.

The headline from Statistics Canada’s latest jobs report is that the nation added 36,000 jobs in August. This had an immediate impact on the value to the Canadian dollar, sending it up over $0.97 USD. Canadian employment now stands above its pre-recession peak of October 2008 by 12,000 jobs. Before the dancing in the streets starts, however, there are a few caveats to mention.

The latest gain in employment all came in the public sector (+58,000). This is a little surprising, considering that all levels of government have been fretting over their budgetary shortcomings. Spending on infrastructure has pushed up deficits and revenues have been anemic due to lower tax collections from individuals and businesses in the difficult times of a year ago.

The private sector shed 21,000 jobs in August. That wasn’t a huge decline, but it was a move backwards. By way of contrast, the U.S. recently took encouragement from an increase (+67,000) in private sector employment in August while the total number of jobs dropped again.

On a month-to-month basis provincially, August’s largest percentage gains in employment occurred in Newfoundland and Labrador (+1.6%) and Saskatchewan (+1.0%). Ontario and New Brunswick formed a second tier (both +0.5%). Nova Scotia and Alberta had mild declines.

Year over year, Prince Edward Island (+5.1%), Newfoundland and Labrador (+3.9%), Quebec (+2.9%) and B.C. have had employment gains higher than the national average (+2.4%). Ontario’s increase in jobs (+2.4%) has been an exact match for the Canada-wide figure. Only New Brunswick (-0.1%) has recorded a year-over-year decline in the number of jobs.

By industrial sector, the largest year-over-year percentage gains came in: professional, scientific and technical services (i.e., legal, accounting and architectural), +8.8%; health care and social assistance, +5.9%; public administration, +4.6%; and educational services, +4.7%. Information, culture and recreation (-4.1%), finance, insurance and real estate (-2.1%), transportation and warehousing (-1.4%), trade (+1.0%) and accommodation (+1.5%) have all been lagging.

Alex Carrick

Find Canadian construction-related economic articles in Canadian Construction Market News and in the Economic Outlook section of Daily Commercial News. Mr. Carrick also has a lifestyle blog that can be reached by clicking here.


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