Month-to-month employment growth in Canada in October 2007 was nearly four times the long-term average. In the U.S., the latest job growth figure was an improvement versus the preceding four months, but was only slightly above the long-term average. The year-over-year increase in employment in Canada now stands at more than double the long-term annual average gain and well ahead of the comparable increase in October of last year. Canada has been a job-creating machine in 2007.

U.S. construction employment continues to suffer as housing starts are leveling off from their precipitous slide, but are not yet at bottom. After a slight hiccup in late 2006 and early 2007, construction employment growth in Canada has bounced back to the 7.0%-plus year-over-year rate. Prospects for the U.S. manufacturing sector have improved, but Canada’s dollar value gains will make the playing field a tougher contest for Canadian manufacturers trying to sell into the U.S.

The U.S. unemployment rate (4.7%) has edged slightly higher over the past six months, but still remains quite low. In Canada, the unemployment rate has just fallen below 6.0% for the first time since November 1974. The bottom line is that labor markets remain tight in both countries. As a result, the returns going to labor have been gradually creeping up.

In third-quarter 2007, Canada’s real (i.e., inflation-adjusted) Gross Domestic Product (GDP) grew at a +2.9% quarter-to-quarter annualized rate. This increase was slower than the upward revised +3.8% rate recorded in the second quarter, but it was considerably faster than the consensus estimate made by forecasters, which had been +2.1%. In view of the economy’s strong performance year to date, CanaData now expects GDP growth for 2007 as a whole to be in the range of +2.4% to +2.6%.

The unemployment rate in Canada is continuing to trend downwards, while in the U.S., it is on a gradual upward path. The reason is because jobs growth north of the border (+2.5%) is considerably faster than south of the border (+1.2%). The different trends in unemployment rates are being reflected in wage rates. The October 2007 year-over-year increase in average hourly wages in Canada is estimated at +4.1%, which compares with +3.8% in the U.S.

As of November 2007, the labour market in Canada remains tight. Every national indicator is strong. This includes a 67.8% participation rate, a 63.8% employment rate, a +2.7% year-over-year gain in employment (the highest in this cycle) and a 5.9% unemployment rate (among the lowest in more than 30 years). As for what is happening in Canada’s major cities, there have been some interesting shifts. Eight of the top ten cities in terms of year-over-year employment growth are now in eastern Canada.

CanaData has slightly lowered its 2007 square footage forecast for total Canada non-residential buildings in response to actual results through October. Total non-residential building starts are now expected to be 95.5 million square feet in 2007, versus the previous forecast of 99.0 made in September. However, total ICI (industrial, commercial and institutional) starts in 2007 will still be a big step up from their level in 2006 at 78.4 million square feet. CanaData’s 2008 forecast is for 88.0 million square feet.

Both the U.S. and Canadian economies have been growing strongly since the first quarter of 2002. That was when corporate profits started to pick up and they have been rising ever since. Therefore, 2007 is the sixth year of healthy activity in the economies of both countries.However, both countries now face more serious challenges than at any time since the dot.com collapse in 2001.

In western Canada and in the country as a whole, Alberta still shines. It is the leader among all the provinces in almost every economic category. However, all the other provinces in the west are also benefiting from the resource sector boom. In eastern Canada, Ontario’s financial sector and large population base carry their own economic momentum and Québec has come roaring back this year, better late than never in this cycle. The Atlantic region is counting on energy projects longer term.

Building code changes, evolving materials and technologies are just some of the items required on a building checklist.