MRO Magazine

Unemployment at highest rate in 11 years as Ontario manufacturing gets hammered

Ottawa, ON -- Following gains in April this year, employment decreased by 42,000 in May 2009, led by further manufa...


Human Resources

June 5, 2009
By MRO Magazine
MRO Magazine

Industries

Ottawa, ON — Following gains in April this year, employment decreased by 42,000 in May 2009, led by further manufacturing losses in Ontario, according to the latest Labour Force Survey from Statistics Canada. The unemployment rate rose by 0.4 percentage points to 8.4%, the highest rate in 11 years. Since the employment peak of last October, employment has fallen by 363,000 or 2.1%.

 

While there were pronounced losses in Ontario in May, employment increased in Manitoba, Nova Scotia and Saskatchewan, and was little changed in all other provinces.

 

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In addition to manufacturing losses in May, transportation and warehousing also declined. Public administration was the only industry with a notable employment increase.

 

Employment declines in May affected mostly men and women aged 25 to 54, while there were employment increases among women aged 55 and over.

 

There were large declines in full-time employment (-59,000) in May, bringing total full-time losses since October to 406,000 (-2.9%). Over the same period, part-time employment has continued to trend up, increasing by 44,000 (+1.4%).

 

The average hourly wage for employees was 3.4% higher in May compared with the same month a year earlier, the lowest year-over-year increase in two years.

 

Continued employment losses in Ontario

 

Ontario was the only province to experience a substantial employment decline in May, down 60,000, bringing total losses since last October to 234,000 or 3.5%. While Ontario accounts for 39% of the total working-age population, it has experienced 64% of overall employment losses since the start of the labour market downturn.

 

Ontario’s unemployment rate in May rose by 0.7 percentage points from the previous month to 9.4%, the highest in 15 years.

 

In May, both manufacturing and construction employment continued their downward trend in Ontario. Since October, the number of workers in manufacturing has fallen by 14.0%, while it has decreased by 9.3% in construction.

 

Employment in Quebec was unchanged in May. An increase in labour force participation pushed the unemployment rate up to 8.7%. Since last October, employment is down by 0.7% in Quebec.

 

Manitoba and Saskatchewan added employment in May with gains of 3,900 and 3,100 respectively. Both provinces had an unemployment rate of 4.9%, the lowest in the country, and are the only two provinces with an increase in employment since last October.

 

Following declines in the two previous months, employment increased by 3,600 in Nova Scotia in May.

 

Sharp decline in manufacturing employment

 

Manufacturing employment continued on its downward trend with a decline of 58,000 in May, mostly in Ontario. This brings losses since October to 186,000 or 9.4%, with the largest decline in transportation equipment manufacturing. Ontario has experienced the brunt of overall manufacturing losses over this period.

 

In May 2009, there were 778,000 factory workers in Ontario, the lowest level since comparable data became available in 1976. Manufacturing employment in Ontario reached a peak in November 2002 with 1,115,000 workers.

 

There was also a decline in transportation and warehousing (-16,000) in May, bringing total losses in that industry to 48,000 (-5.5%) since October. Public administration was the only industry with notable gains in May, up 19,000.

 

Self-employment fell by 32,000 in May, offsetting the gain in April. The number of private sector employees continued to decline, down 36,000 in May, while public sector employment was up 27,000, largely driven by the gains in public administration.

 

Since October, the number of private sector employees has fallen by 2.9% and public sector employment has declined by 1.3%. Over the same period, the number of self-employed has shown little change.

 

Fewer people aged 25 to 54 working

 

Employment fell by 50,000 in May for persons aged 25 to 54, with losses of 28,000 among men and 22,000 among women. Since the start of the labour market downturn, however, it is men in this age group who have experienced most of the losses, down 3.4%, while employment among core-age women has fallen by 1.1% over the same period.

 

Employment for women aged 55 and over increased in May, up 16,000. Since last October, employment among older women has risen by 3.1%, while employment for older men has shown little change.

 

Although employment edged down among youths aged 15 to 24 in May, losses for this group have been substantial during the current labour market downturn, with losses since last October totalling 134,000 or 5.1%. In May, the unemployment rate for youths climbed to 14.9%, the highest rate since 1999.

 

A difficult start to the summer for students aged 20 to 24

 

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 who intend to return to school in the fall. The May survey results provide the first indicators of the summer job market, especially for students aged 20 to 24, as students aged 15 to 19 were not yet out of school for the summer. The data for June, July and August will provide further insight into the summer job market. The published estimates are not seasonally adjusted; therefore comparisons can only be made from one year to another.

 

The summer job market started in May for students aged 20 to 24. The number of employed students fell by 59,000 compared with a year earlier, all in full time. At the same time, their participation in the labour force fell substantially from 75.2% to 68.6%. May’s unemployment rate was 18.3% for this group of students, compared with 15.4% in May 2008.

 

A more detailed summary, Labour Force Information (71-001-X, free) is now available online for the week ending May 16. From the Publications module of statcan.gc.ca, under All subjects, choose Labour. The next release of the Labour Force Survey will be on July 10, 2009.