MRO Magazine

Employment rose slightly in 2003 despite drop in manufacturing jobs

Ottawa, ON -- Employment in Canada surged ahead during the last four months of 2003, salvaging at least a modest im...


Industry

March 9, 2004
By MRO Magazine
MRO Magazine

Ottawa, ON — Employment in Canada surged ahead during the last four months of 2003, salvaging at least a modest improvement from 2002, according to Statistics Canada’s Labour Market year-end review.

On average, just over 15.7 million people were employed last year, an increase of about 334,000, or 2.2%, from 2002. This average represented 62.4% of the working-age population, the highest annual rate of employment on record.

The year got off to a slow start. Job gains during the first eight months were minimal. Over the year, the economy was rocked by a rapidly rising Canadian dollar, and probably to a lesser extent by war in Iraq, the SARS scare and the mid-August power blackout. The last time such a sustained period of labour market weakness occurred was in 2001, when Canada only narrowly avoided a recession.

For 2003 as a whole, the unemployment rate averaged 7.6%, down slightly from 7.7% in 2002. With participation rates also at record highs throughout the year, the unemployment rate rose at the start of 2003, when job gains were weak. By the end of the year, the rate was down.

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After a spectacular job-creating performance in 2002, the manufacturing sector fell prey to the rising dollar, among other factors, which made Canadian goods more expensive for American customers. On average, 2.3 million people were employed in manufacturing in 2003, down by 32,000, or 1.4%, from 2002.

Much of the country’s employment gains during the last four months came in full-time work. For the year, there were 253,000 more full-time workers than in 2002, a 2.0% increase. Part-time employment increased 81,000, or 2.8%.

The decline in manufacturing employment had a significant effect on the country’s overall employment trend. In fact, gains in employment outside manufacturing rolled along at 2.9%, a pace similar to the previous year.

The weakness in manufacturing was concentrated in computer and electronic equipment, as well as in transportation equipment.

For the first 10 months of 2003, cumulative new motor vehicle sales were 4.2% below the level for the same period of 2002, which was a record year for sales.

Shipments of computer and electronic equipment fell 14.3% in the first 10 months of 2003. The value of computer and electronic equipment shipments was half the 2000 level, when high-tech production was at its peak.

Youth and core-age workers (25 to 54) were hit hardest by the manufacturing slump. On average, 15,000 fewer young people and 26,000 fewer core-age people worked in manufacturing in 2003.

However, the labour market was buoyed by housing construction, where activity was robust. On average, more than 931,000 workers were employed in construction last year, up 49,000, or 5.5%, from 2002.

As a spin-off, gains in finance, insurance, real estate and leasing amounted to 41,000, or 4.5%, most occurring in real estate.

Added construction and real estate jobs led to a second consecutive gain in self-employment. On average last year, 2,400,000 people were self-employed, up 67,000, which followed a gain of 37,000 in 2002. Prior to these back-to-back gains, self-employment had been on a downward trend.

With health care spending tracking upward, health care and social assistance employment continued to grow in 2003, much of it concentrated in Ontario and Quebec. Another big source of jobs in 2003 was public administration, where employment surged by 37,000.

Older workers lead job gains

While all major groups managed employment gains in 2003, it was the third consecutive year for older workers to lead the way. The median age of retirement in 2003 was nearly 62, up from just under 61 in the late 1990s.

Employment among men aged 55 and older rose by 88,000, or 8.3%, while employment among women in this group rose by 102,000, or 14.2%.

Among older women, the largest gains occurred in health care and social assistance. For older men, gains were in education, construction and real estate.

Among core-age workers, women were the main beneficiaries of public sector hiring. On average, employment in 2003 among core-age women was up 59,000, or 1.1%, from 2002. Over three-quarters of this gain occurred in health care, and social assistance and public administration.

Employment among core-age men also rose, largely the result of the construction boom. Overall, employment for core-age men was up 46,000, or 0.8%.

While youth employment fell through much of the year, their average level of employment remained high. Youth employment averaged 2.4 million in 2003, up 40,000, or 1.7%, from the year before.

Strongest employment gains in Alberta and Ontario

Employment increased in every province in 2003 except New Brunswick.

Employment growth has been strong in Alberta for over a decade. In 2003, employment increased a further 48,000, or 2.9%, from its average a year earlier, driven by hiring in the oil patch and in retail and wholesale trade. On average, the unemployment rate in Alberta was 5.1% last year, down from 5.3% in 2002. Oil patch employment was up 9,000.

In Ontario, employment gains at the outset and end of the year helped push employment up 160,000, or 2.6%, from 2002. This occurred despite weakness during the summer months in the Toronto area. Ontario’s unemployment rate averaged 7.0% in 2003, down 0.1 percentage points.

Almost all the decline in manufacturing across the country occurred in Ontario and Quebec. In Ontario, just under 1.1 million people were employed in manufacturing, down 28,000, or 2.5%, from 2002. In Quebec, manufacturing employment fell 17,000 after a gain of 13,000 in 2002.

Following a strong 2002, employment growth slowed last year in Quebec. On average, employment was 57,000, or 1.6%, higher than in 2002, just under half the increase in 2002.

Driven by gains in Vancouver, the average employment level in British Columbia was 50,000, or 2.5%, higher than in 2002. Employment in Vancouver was up 34,000, or 3.2%. British Columbia’s unemployment rate was 8.1% in 2003, down from 8.5% the year previous.

In Newfoundland and Labrador, employment was up for the third consecutive year. In 2003, its average employment level rose 4,000, or 1.8%. Although lower than a decade earlier, unemployment remained stubbornly high in Newfoundland and Labrador. Its average unemployment rate was 16.7%, about the same in 2002.

The only province where average employment fell was New Brunswick. Following a gain of 3.3% in 2002, employment edged down 0.2%. This was enough to cause the unemployment rate to inch up 0.2 points to 10.6%. Employment was down mostly in accommodation and food.