Service Sector Job Growth in Canada is Tracking the U.S. Downward
Alex Carrick
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Seed Newsvine |
The first graph below shows that total employment growth in Canada has remained much stronger than in the United States for more than a year-and-a-half. Much of the credit for this goes to a housing sector that, so far, has shown few signs of flagging in Canada, thereby maintaining good construction job growth.
Service Sector Job Growth Drops by Half (from +3.5% to +1.8%)
Nevertheless, weakness in some key manufacturing sectors (forest products and automotive) is now leaching over into the services sector. As can be seen from the second graph, the year-over-year change in Canadian services employment is tracking the U.S. downward, but with a marked lag. Canada’s service sector job growth (+1.8%) in June 2008 was only about half of what it was in the fall of last year (+3.5%).
Still Strong Job Growth in Four Sub-sectors
The sub-sectors of services that are still providing good job growth are: public administration (+8.0%); professional, scientific and technical services (+7.5%); transportation and warehousing (+4.0%); and health care and social assistance (+2.8%). The first and fourth of these categories are government jobs. Transportation and warehousing strength relates to ongoing high-volume shipments of raw materials.
Job Weakness in Four Other Sub-sectors
The strength in professional services – legal, accounting and architectural – is good news for office building occupancy rates. However, acting to counterbalance that rosy picture have been the job performances in some other office-oriented sectors: finance, insurance and real estate (+0.4% year over year); and information, culture and recreation (-2.7%).
Two other areas of weakness in services have been wholesale and retail trade (-0.1%) and accommodation and food services (-0.5%). The former is reflected in CanaData’s retail construction starts through the first half of this year, down by about one-third versus the same period last year. The latter category is being hurt by the decline in the number of visitors from the United States, as well as high motor vehicle and airplane fuel costs.
