Eh is not OK: Canada’s Jobs Begin to Unravel
Canada’s employment stats for February were not what most expected – there was a huge jump in full time jobs. Most commentators tried to put a positive spin on this but I have to disagree. Canada’s labour market is struggling and the outlook for the near future isn’t looking any better.
The chart below is what the Bank of Canada tracks as a measure of the broader health of the labour market. As you can see aggregate hours (the sum of all hours worked by full time and part time employees) have been flat over the past year.
What limited strength exists in the labour market comes from two unsustainable sources: construction and the public sector.
What’s worrisome is the impact of oil prices in Alberta. As per Macquarie, half of the gains in construction employment across Canada occurred in Alberta, a province where construction activity is likely to retreat. As you can see in 1986 in the months following the decline in oil, Alberta’s construction industry employment fell by 17%. A similar decline in coming months would mean nearly 50K in construction job losses in Alberta.
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