||By Kevin Dee,
Chairman of the Board at Eagle
The unemployment rate at the end September was 6.2%, an improvement from the 6.5% unemployment rate at the end of June. During the previous 12 months, Canada added 320,000 jobs (almost 289,000 full time).
For the purposes of this report I focus on the TSX and during the third quarter it returned to the Q1 level just above 15,600, a gain of about 500 points.
The oil patch continues to struggle, with the price of a barrel hovering in and around the $50 a barrel range. The continued lack of support from the various levels of government has led to the cancellation of the Energy East pipeline. This will mean (a) lost jobs, but also (b) reinforce a message to the investment community that Alberta oil is not a good investment.
The Canadian dollar has been relatively strong lately and in the third quarter ranged between 78c US and 82c US.
There is little change in the banking sector, which is one of the bigger employers in Canada. The talent demands for the banks address areas such as regulatory changes, new product development, new service offerings and addressing the aging workforce. On the other side, new technology and offerings also displaces some of the roles traditionally found at the banks. The banks remain a good place to find employment, but increasingly the skills needed are specialised.
The telecommunications sector is another large employer in Canada. Like the banks, this sector is operating in an environment affected by new technological change, demographic pressures and regulatory change in addition to extreme competition. While they demand the best talent in order to compete, they are also careful about keeping employment costs under control, particularly as they are also acquisitive, which can mean a big focus on integration of acquired companies. Some of the drivers of demand here include the highly competitive nature of the business, investment in infrastructure, technological innovation and a need to plan for a retiring “Boomer” workforce.
The US economy continues to add jobs, and over the third quarter averaged about 90,000 new jobs per month. The demand for skills in the US is luring talent from Canada which is good for the individuals but not so good for Canada in the long term.
The demand for the “trades” continues unabated, as the construction industry seems to be forever busy. Cranes dot the skies of Canada’s largest cities, and home renovation projects are hard to staff!
The three levels of government in Canada are big employers. As an example almost all of the jobs added in Canada in September (about 100,0000) can be attributed to public sector jobs. Clearly the increased government spending is not a boon for the economy, but good for those looking for public sector jobs.
The Canadian Staffing Index is an indicator of the strength of the largest provider of talent in any economy (the staffing industry) and an excellent barometer of the health of Canada’s economy. The reading at the end of the second quarter was 114, which was up from 110 last quarter, and also 110 in Q3 last year.
Here at Eagle, we experienced an expected drop in demand over the Summer months, of about 10% from the second quarter however demand was up 10% over the same quarter in 2016. There was a corresponding drop in people looking for work over the Summer months.
The Greater Toronto Area (GTA) is Eagle’s busiest region, representing about 60% of our business. It is also the 4th largest city in North America, containing more than 50% of Canadian head offices and with a population of approximately six (6) million. This market continues to be one of the busiest markets in Canada, and we see strong demand from our clients for skilled talent. There is some concern that new legislation from the Ontario Government (Bill 148) will have a negative effect on the temporary help market in particular.
Western Canada continues to struggle, receiving little help from our Federal government and not helping themselves much at the provincial level. The cancelling of the Energy East pipeline was a tough blow for the region and optimism in the oil patch is low. While the Conference Board had expected Alberta to be the fastest growing province in Canada for 2017 I doubt we will see that happen. The BC economy continues to do well despite the concerns about legislation to curb foreign investment in real estate.
Eagle’s Eastern Canada region covers Ottawa, Montreal & the “Maritimes”. Ottawa is very much a government town again, although there are some smaller tech companies rising from the ashes of Nortel, JDS and the previously large tech sector. The government continues to employ a lot of people (22,000 more in The NCR since the Liberal government took office) but despite significant Federal government hiring the unemployment rate in Ottawa has been a concern. Quebec appears to be enjoying a renaissance as its unemployment rate is now better than Ontario’s, in addition to having healthier finances. They have been able to attract industries (such as large data centres) to help the economy and add jobs. It doesn’t hurt that their hydro rates are very competitive as opposed to Ontario’s situation. The Maritime Provinces don’t represent a great opportunity for the job seeker, however PEI and Nova Scotia are both showing signs of an improving economy.
The Hot Client Demand.
At Eagle our focus in on professional staffing and the people in demand from our clients have been fairly consistent for some time. Program Managers, Project Managers and Business Analysts always seem to be in demand. It might just be our focus, but Change Management and Organizational Excellence resources are in relatively high demand too. Digital, big data, data scientists, analytics, CRM, web (portal and self-serve) and mobile expertise (especially developers) are specializations that we are seeing more and more. On the Finance and Accounting side, we see a consistent need for Financial Analysts, Accountants with designations and public accounting experience plus Controllers as a fairly consistent talent request. Expertise in the Capital markets, both technical and functional, tends to be a constant ask in the GTA. Technology experts with functional expertise in Health Care is another skill set that also sees plenty of demand. This demand fluctuates based on geography and industry sectors, so we advise candidates to watch our website and apply for the roles for which they are best suited.
Outside of Eagle’s realm some of the in-demand skills include the classic tradespeople, drivers, and new tech skills like Artificial Intelligence, Robotics, video gaming skills etc.
There are numerous good indicators for Canada’s economy and hence job seekers, but there are also some challenges on the horizon:
- NAFTA re-negotiations may have a negative impact on our economy;
- We don’t yet understand all the implications of the Energy East project being cancelled;
- January in Ontario will see the introduction of Bill 148, a severe increase in minimum wage plus new labor laws that will hurt business and cost jobs;
- January we will see the introduction of new carbon taxes in Ontario;
- Our Federal Government is introducing new tax changes affecting small business, possibly to help pay for their out of control spending;
- At the same time that Canada is raising taxes, the US is encouraging small business through tax breaks, which may well cost Canada as some companies will be forced to go where they can make money.
If all of this goes ahead, then we will see a big impact on the job market.
Canada added 320,000 jobs in the last year which is good news for today’s job seekers. The BIG elephant in the room is whether the factors listed above will conspire to undermine our economy and create a government driven recession.
For job seekers there remain the bright spots, caused by demographic shifts (retiring Baby Boomers), jobs moving to Canada from more expensive places like Silicon Valley and companies developing new technologies. The large employers, such as banking sector, insurance sector, retail sector, telecommunications sector and the construction industry will always require large workforces representing job opportunity. The growth of the “gig economy” creates new opportunities for people to define their own destiny and become mini-entrepreneurs, or build new enterprises.
The effect of US policy changes by the Trump administration remain to be seen. Having said that, some possible impacts include immigration (positive for Canada); trade agreements & protectionist policies such as the NAFTA negotiations (possibly negative for Canada); and defense (possibly negative for Canada) all having some impact.
Job seekers should research and understand the growing sectors and where the in-demand jobs are. They also need to be willing to go where the work is! If I was looking for work I would be moving to the larger centres, investing in in-demand skills and increasing my marketability with the right “attitude”.
That was my look at the Canadian job market for the third quarter of 2017 and some of its influences.