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October 2010 study: Canada’s labour market downturn two years later

Ottawa, ON - The October 2010 Labour Force Survey from Statistics Canada includes an analysis of the labour ma...


Ottawa, ON – The October 2010 Labour Force Survey from Statistics Canada includes an analysis of the labour market over the past two years. Employment in Canada reached a high in the fall of 2008, then declined steeply over a period of nine months. Since the summer of 2009, employment has increased, particularly in the first half of 2010.

Although employment has returned to its pre-recession level of October 2008, the unemployment rate remains around 8%, well above its pre-recession level of 6.2%. Over this two-year period, the working-age population (15 years and over) grew by 2.9%, and the labour force – those working or looking for work – rose by 1.9%.

Across the provinces, Newfoundland and Labrador (+3.1%), Manitoba (+2.9%), Prince Edward Island (+2.3%), Quebec (+1.5%), Saskatchewan (+0.9%) and British Columbia (+0.6%) added employment compared with October 2008, while New Brunswick (-1.8%), Nova Scotia (-1.7%), Alberta (-1.1%) and Ontario (-0.9%) experienced losses.

These provincial differences were partly driven by the industrial composition of the economy. Over the two years, employment in the manufacturing sector dropped 10.8%, with significant declines in Ontario and Alberta. Transportation and warehousing declined by 5.4%, with notable losses in Ontario, Quebec, Alberta and New Brunswick. Natural resources remained 2.6% below its October 2008 level, with Quebec, British Columbia and Nova Scotia most affected.

Gains in construction were widespread across the country, as employment in that sector has now returned to its pre-recession level. British Columbia was the only exception, as construction employment dropped 13.6% below its October 2008 level.

Compared with October 2008, employment increased notably in health care and social assistance (+6.7%), as well as in professional, scientific and technical services (+6.7%). All provinces shared in the gains observed in health care and social assistance, but growth was particularly strong in Alberta, Nova Scotia and Newfoundland and Labrador. Increases in professional, scientific and technical services occurred mostly in Quebec, Ontario, British Columbia and Manitoba.

Employment fell steeply during the downturn for youths (15 to 24) and men aged 25 to 54. In October 2010, employment among youths remained 7.8% below its October 2008 level, while the number of workers aged 25 to 54 was just below its pre-recession level (-1.0% for men and -0.7% for women). Workers aged 55 and over, however, experienced employment growth between October 2008 and October 2010, up 13.5% for women and 10.0% for men.

During the downturn, full-time employment saw large declines, while part-time increased. Although overall employment has returned to its pre-recession level, full-time employment remains 102,000 or 0.7% below its peak, while there are 110,000 (+3.5%) more workers employed part time.

Total hours worked in the labour market fell steeply during the downturn (-3.7%) and have since picked up, increasing by 2.9%. However, unlike total employment, the number of hours worked in October 2010 remained 0.9% below the October 2008 level.