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.

Go to Alex Carrick's blog home

Construction Industry Forecasts

Notes from Alex Carrick - Feb 03, 2012

Alex Carrick
Canada’s labour market flat in January but U.S. on a roll

The best news for Canada on the labour front is the jobs situation in the United States.

Employment here in January stayed flat, according to Statistics Canada.

In the same month, south of the border, 243,000 net new jobs were created, according to the latest report from the Bureau of Labor Statistics.

That means nearly a quarter of a million people with fresh incomes to spend. Through cross-border trade, some of the money will wend its way north.

The U.S. has created jobs in the past 16 straight months. The cumulative gain has been 2.3 million.

It’s also been making progress from a psychological standpoint. The U.S. unemployment rate dropped again in January, to 8.3%.

That was a 0.2 percentage point markdown, from 8.5% in the preceding month.

The U.S. jobless rate has been falling in a fairly steady progression since June of last year when it was 9.2%.

The worst number for U.S. unemployment occurred in October 2009 at 10.1%.

Canada’s unemployment rate peaked at 8.7% in August 2009. It dropped as low as 7.1% in September of last year, but has been creeping back up since then.

The percentage of Canada’s workforce on the sidelines in January increased 0.1 percentage points to 7.6% from 7.5% in December.

If it comes down to bragging rights, the U.S. has more to crow about than we do in a number of labor market areas.

In January, year-over-year total employment in the U.S. was +1.5%. Canada trailed at +0.7%.

U.S. service sector employment in the latest month was 2.0% higher than in January of last year. Canada’s increase was only half that rate, +1.0%.

U.S. manufacturing employment rose 2.0% year over year in January while Canada’s fell 2.5%.


Year-over-year employment gains in two key sub-categories of U.S. manufacturing stood out in January – motor vehicles and parts (+6.3%) and machinery production (+6.7%).

There have been two influences at work, improved auto sales at home and strong orders for construction and agricultural equipment from buyers in emerging nations.

Even in construction, the U.S. (+2.1%) recorded a higher rate of jobs growth year over year in January than Canada (+1.3%).

Insight into how Canada’s economy is currently performing can be found in retail trade employment (-0.2%), which has been flat year-over-year, and in the number of finance, insurance and real estate (-4.6%) jobs, which has been decidedly negative.

When interest rates aren’t moving, banks don’t make as much money. They earn their profits by borrowing money cheaply (deposits, etc.) and lending it out at higher rates.

If profits are to be maintained when that formula isn’t working, something has to give. That something is jobs.

And while housing starts have stayed strong, sales of existing homes have been a little more conservative. There have been some price declines, most notably in Victoria and Vancouver.

U.S. retail employment in January was a nice-to-see +1.3% year over year.

The +0.3% figure for financial activities employment south of the border was actually pretty good. This sector has been a leader in shedding jobs since the world-wide credit crisis was launched in early 2009.

One area where Canada did turn in a strong performance in January was in accommodation and food services employment, +7.9% year over year. The corresponding leisure and hospitality category of employment in the U.S. was positive, but not to the same degree, +2.7%.

The foregoing relates mainly to the private sector.

In the public sector, we know that “austerity” has become the buzz word of the day. Alarmed about nearly out-of-control debt levels, and frightened by the news out of Europe, politicians have been talking little else except the need to slash costs and cut payrolls. 

The rhetoric may be louder than warranted by the accompanying action. 

Here’s an oddity. Or maybe it’s deliberate. You decide whether or not the following is a coincidence.

Employment in public administration in Canada is -1.4% year over year.

The decline in government employment in the U.S. is almost exactly the same, at -1.2%.

Furthermore, the three sub-levels of government appear to be reading from the same script. 

The number or workers reporting to Washington in January was -1.5%. State employment was -1.4%.

Local government was a little easier on its workers, recording a decline in jobs of only 1.1%.

Returning to Canada’s labour market and setting out some regional comparisons, Alberta continued to lead the provinces with a year-over-year increase in employment of +3.9%.

Among large-population provinces, B.C. placed second at +1.7%.

Ontario’s year-over-year change was +0.7%. Quebec recorded a decline of 1.1%.

Alberta, with a relatively small population, added by far the largest number of jobs in nominal terms, +79,500, nearly double second-place Ontario’s +44,000.

On a final note, Alberta (4.9%) also recorded the lowest unemployment rate among the provinces, although both Saskatchewan (5.0%) and Manitoba (5.4%) provided some competition.

Alex Carrick

Find Canadian construction-related economic articles in Canadian Construction Market News and in the Economic Outlook section of Daily Commercial News.


Email

RSS Feed

» back to blog home

Member Comments

Post Your Own Comments 
» Not a member? Register now to become one. Otherwise, login to post your comments on this article.

Read Other Recent Alex Carrick Posts

05/14 - Economic Nuggets - May 15, 2012
05/11 - Canada Rode a Second Consecutive Month of Strong Job Gains in April
05/04 - U.S. Employment Rose by a Mediocre 115,000 in April
04/27 - U.S. GDP +2.2% in Q1 2012 and Alberta led Canadian Provinces in 2011
04/18 - U.S. Inflation Low in March; Canada’s Central Bank Looking to Raise Rates
04/12 - Canada’s Trade Surplus in February Declined but Business is Optimistic
04/03 - A Tale of Two Budgets
03/29 - A strong year for new construction investment intentions in 2012
03/21 - Leading Indicator Series Add to Good News about the U.S. and Canadian Economies
03/06 - Three key trends, more forays into high-tech and the importance for construction
02/29 - Two important sources of strength: share prices and non-residential construction
02/22 - Home resale market may be picking up in the U.S. while flattening in Canada
02/16 - Good news on U.S. housing and employment is positive for Canada as well
02/08 - Home starts and job levels diverge in Canada and the U.S.
01/23 - Canada’s leading indicator series continued to charge ahead in December
01/12 - 2012 holds promise but there’s no denying the uncertainty (part 2)
01/11 - 2012 holds promise but there’s no denying the uncertainty (part 1)
01/04 - How stock prices have performed depends on the timing of the data points
12/22 - Canada stands firmly in the middle of the road as it enters 2012
12/14 - Trade issues climb the agenda in both Canada and the U.S.

click here to update your log-in and member information

click here to maintain your company profile & view metrics