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BMO says Canadian Employment great, but not the whole story


June 10, 2013
By Anthony Capkun

June 9, 2013 – May’s furious gain of 95,000 net new jobs in Canada was close to the largest single monthly gain on record, according to BMO Economics.

“Details of the Canadian Labour Force Survey were uniformly impressive,” said Doug Porter, chief economist, BMO Capital Markets. “Full-time jobs were up 76,700; private sector employment rose by 94,600; and the jobless rate dropped to 7.1%. As well, the youth category was notably strong with an increase of 54,400 jobs, making the summer job market look much better.”

Porter noted that while these statistics put a much healthier glow on the outlook for Canadian growth, they do not tell the whole story. “No question this is a staggering report. However, the volatility in Canada’s employment reports puts a massive warning label on this release; even with the big move, the 3-month trend is actually a bit below average for job growth. Before racing to conclusions that the economy is suddenly on a tear, note that the spectacular monthly gain simply offsets a prolonged period of softness in Canadian jobs to start the year.”

Regionally, Ontario, Quebec and Alberta accounted for almost all of the gains. Every province east of and including Manitoba saw its jobless rate drop, while the three Western provinces reported somewhat higher jobless rates. Ontario and all of Atlantic Canada saw especially large declines in their jobless rates, with Ontario dropping four ticks to 7.3%, versus 7.7% in Quebec and 7.1% nationally.

Among industries, the biggest star was construction: up 42,700, accounting for almost half of the gain. Other strong sectors included retail and wholesale trade, management and administration, hotels and restaurants, and education. Employment levels in the manufacturing sector, however, fell 14,200, and have now declined 5.5% year over year.

May’s job numbers are in line with the results of a recent BMO Bank of Montreal survey, which found that one-quarter (24%) of business owners expect the size of their workforce to increase this year.

“Canadian companies recognize the level of talent and expertise they need to remain competitive and grow. Business owners are making a commitment to invest more money in their business in order to build human capital, open up new markets and upgrade technologies and processes,” said Steve Murphy, senior vice-president, Commercial Banking, BMO Bank of Montreal. “Business owners are continually looking for ways to increase their productivity; build out a skilled workforce will help drive performance to the next level.”