MRO Magazine

Nunavut data added to Labour Force Survey for first time

Ottawa, ON -- Employment was unchanged for the second consecutive month in July 2006, as gains in full time were of...


Human Resources

August 10, 2006
By MRO Magazine
MRO Magazine

Ottawa, ON — Employment was unchanged for the second consecutive month in July 2006, as gains in full time were offset by similar declines in part time, according to the latest Labour Force Survey from Statistics Canada. This leaves overall growth so far this year at 1.3% (+210,000), up from the 0.9% gain observed over the first seven months of last year.

There was a jump in the number of people entering the labour force in search of work in July. This pushed the unemployment rate up 0.3 percentage points to 6.4%, still among the lowest in 30 years. Ontario and British Columbia accounted for the lion’s share of the increase in labour force participation. After falling for much of the previous two years, labour force participation in Canada has edged up 0.2 percentage points since the start of 2006, to 67.3% in July.

In recent months, the Labour Force Survey (LFS) has been reporting very low unemployment rates. The rates have been so low that some LFS users want to understand the historical context in which these rates are presented. Caution must be stressed when comparing recent LFS employment and unemployment estimates to those prior to 1976 when the questionnaire underwent significant changes.

The 1976 LFS questionnaire introduced direct questioning to determine labour market status. This replaced the “main activity” style of information previously recorded. In 1975, both the new and old questionnaires were run in parallel. An analysis of the impact on employment and unemployment estimates showed that the new questionnaire measured more employment, especially among youths and women. It also picked up more unemployment, most notably among women.

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At the time of the conversion to the new questionnaire, a historical series was created by adjusting pre-1976 estimates of employment and unemployment using factors determined from the parallel run. Ratios were applied to the 1966 to 1975 data to make them more (but not strictly) comparable to the new estimates. Although these adjusted 1966 to 1975 data are available, users should still be cautious when comparing the two periods because of the different questionnaires used to measure employment and unemployment. Approaching 1966, further caution should be used.

For the second consecutive month, employment was little changed in almost all provinces. However, there was robust growth in the first seven months of the year in some parts of the country. Since the start of the year, the rate of employment growth in Alberta (+3.9%) was three times higher than the national average. Saskatchewan also experienced relatively strong growth over the same period (+2.3%), while Ontario and British Columbia matched the national average.

There was more employment in construction in July, especially in British Columbia. There were also more people working in public administration, mainly at the federal and municipal level.

Employment in manufacturing continued to decline, mostly in the industrial heartland of Central Canada, maintaining a downward trend that began at the end of 2002.

In the first seven months of 2006, there was strong employment growth in a number of industries, namely, natural resources (+5.6%); health care and social assistance (+5.2%); finance, insurance, real estate and leasing (+4.9%) and business, building and other support services (+3.7%).

Average hourly wages were up 3.7% from July of last year, remaining above the most recent year-over-year increase of 2.5% in the Consumer Price Index. Wage growth continues to be strong in Alberta’s tight labour market, jumping 7.4% from a year ago, double the rate of increase in the Consumer Price Index for the province. In the last 12 months, wages have surged 9.3% in Calgary.

GAINS IN CONSTRUCTION AND PUBLIC ADMINISTRATION

Employment increased by 22,000 in construction in July, offsetting the decrease the month before. Just over one-third of this gain occurred in British Columbia. According to estimates compiled by Canada Mortgage and Housing Corporation, urban housing starts increased in June compared to May. British Columbia recorded the strongest increase, with urban starts rising 14.8%.

Despite the increase in construction in July, the number of people working in the industry has levelled off so far in 2006, following strong growth in the preceding two years. The most recent gross domestic product estimates for construction indicate that output fell for the three consecutive months ending in May.

In July, employment also increased in public administration, up 19,000, mostly in federal and municipal administration. Over the last two years, employment growth in public administration has kept pace with that of overall employment.

MANUFACTURING WEAKNESS

Manufacturing continued to experience weakness in July as employment fell by an estimated 33,000, bringing total losses since the end of 2002 to 224,000 or 9.6%. Compared to the decline during the recession of the early 1990s, employment fell much more sharply over the same span of time, down 338,000 or 16.0%. The losses in July were felt most strongly in Ontario and Quebec.

Employment in transportation and warehousing fell by 17,000 in July, the second significant decrease since the start of the year. Over the last 12 months, there has been no employment growth for this industry.

ALBERTA LEADING EMPLOYMENT GROWTH IN 2006

Although employment in Alberta paused for the second consecutive month, since the start of the year, it has grown by 3.9% (+70,000), three times the national average. The gains over this period have stemmed from solid increases in natural resources; public administration; health care and social assistance as well as construction. The province has experienced the strongest increase in working-age population in the country, contributing to robust employment growth. The unemployment rate edged up 0.1 percentage points to 3.6% in July, still among the lowest in three decades.

For the second consecutive month, employment in Saskatchewan edged up 2,000, bringing total gains since the start of the year to 11,000 (+2.3%). This strong growth observed over the first seven months of 2006 has pushed the unemployment rate down 0.6 percentage points to 4.7% over the same period. Gains so far this year have been in trade; health care and social assistance; agriculture and construction. Both the province’s employment rate of 65.8% and the participation rate of 69.0% reached record highs in July.

For the second consecutive month, employment was little changed in Central Canada. In Quebec, an increase of 22,000 in full-time employment was offset by a decline of similar magnitude in part time, leaving the unemployment rate virtually unchanged at 8.1% (+0.1). So far this year, employment in the province is up only 0.5%, following relatively strong growth in the second half of last year.

In contrast, employment in Ontario is up 1.3% over the first seven months of 2006, despite little change in recent months. In July, a substantial increase in the number of people looking for work pushed the unemployment rate in Ontario up 0.6 percentage points to 6.5%. While manufacturing employment has been weak in both Ontario and Quebec, the offsetting effects from gains in the service sector continue to be stronger in Ontario.

In British Columbia, more people were looking for work in July, pushing the unemployment rate up 0.4 percentage points to 4.7%, still among the lowest in the country. Along with the low unemployment rate, the province has also experienced wage growth. Compared to 12 months ago, average hourly wages have advanced 4.0%, second only to Alberta.

Manitoba’s unemployment rate increased by an estimated 1.1 percentage points in July to 4.7% as employment edged down slightly and more people entered the labour market in search of work.

New Brunswick was the only province to experience a significant employment decline in July (-3,000), pushing the unemployment rate up by 0.9 percentage points to 8.9%. This lea
ves employment in the province near the same level as at the end of 2005, but still up (+6,000 or 1.7%) from 12 months ago.

NUNAVUT DATA ADDED FOR FIRST TIME

With this release, Labour Force Survey data for the 10 largest communities in Nunavut is publicly available for the first time. These new data show a relatively low employment rate and high unemployment for the territory. On average for May to July 2006, the employment rate was 58.5% (not seasonally adjusted) while the unemployment rate was 11.6%.

The situation is very different in the other two territories, where employment and unemployment are comparable to the western provinces. For May to July, three-quarters of the working-age population were employed in the Yukon (75.8%, not seasonally adjusted) and the Northwest Territories (75.1%), while unemployment rates were below the national average, at 5.2% in the Yukon and 6.5% in the Northwest Territories.

WOMEN CONTINUE TO ENTER LABOUR MARKET

Employment among women aged 25 and over increased 16,000 in July. The labour force participation rate of adult women continued to reach record highs, up 0.3 percentage points in July to 61.6%. Overall employment among adult men remained stable. There were fewer youths employed in July (-22,000) with all of the loss in part-time.

So far in 2006, employment among adults has grown by 193,000 (+1.4%), mostly among women aged 25 and over. Over the same seven month period, youth employment has grown at a much slower rate of only 0.7% or 17,000. The fastest rate of employment growth among adults has come from older workers aged 55 and over (+4.6% or 102,000) with most of the increase among older women. The surge in the number of older workers is explained in part by demographics as more baby boomers enter this age category and is also partly attributable to a strong labour market.

BETTER SUMMER EMPLOYMENT OPPORTUNITIES FOR MOST STUDENTS

Despite a slow start in May and June, the summer job market for students aged 20 to 24 picked up in July. Compared to 12 months earlier, a greater share of these students was employed (75.2%), up 2.2 percentage points. About two-thirds of these students worked full time this July and their unemployment rate dropped 3.2 percentage points from 12 months ago to 5.0%, a 17-year low for July.

For teens aged 17 to 19, the employment rate increased 2.8 percentage points to 66.6% compared to July 2005. The proportion of 17 to 19 year-olds with a summer job in July had fallen for three consecutive summers prior to this increase and is now at the same level as in July 2003.

The summer job market did not improve for younger teenagers aged 15 to 16. Compared to a year ago, the employment rate among this group edged down 0.7 percentage points to 37.3%.

Note: From May to August, the Labour Force Survey collects labour market information about young people aged 15 to 24 who were attending school full-time in March and intend to return to school in the fall. The published estimates are not seasonally adjusted. Therefore, comparisons can only be made on a year-over-year basis.