Canada ends 2016 with a hiring spree and posts an unexpected trade surplus in November, reports The Conference Board of Canada’s Chief Economist Craig Alexander.
“Canada experienced an unexpected hiring spree of full-time jobs in December and delivered strong export growth in November,” says Alexander. “These strong reports in late 2016 set the stage for the Canadian economy to deliver a better performance in 2017,” said Craig Alexander, Senior Vice-President and Chief Economist, The Conference Board of Canada.
Insights on job creation and trade performance
· Canada ended 2016 with a hiring spree and, in contrast to much of the year, the quality of job creation in December was favourable as full-time positions were added. Canada’s trade performance in November was also outstanding, with strong gains in the value and the volume of exports that created an unexpected trade surplus.
· The Canadian economy created a whopping 53,700 net new jobs last December. A remarkable 81,300 full-time positions were created, offsetting a decline of 27,600 part-time jobs. The unemployment rate edged up by 0.1 percentage point to 6.9 percent, but this reflected rising in labour force participation rate which is a favourable outcome since it implies more individuals feeling optimistic about the possibility of finding gainful employment. The job creation was shared between the public and private sector, while self employment pulled back last month. The employment growth was concentrated in services (+52,000) with goods-producing employment close to flat (+1,700). Quebec posted the strongest hiring (+20,400), followed by B.C. (+17,000). Alberta had some good news with 6,900 jobs created, which led the provincial unemployment rate to fall from 9.0 percent in November to 8.5 percent in December.
· The favourable performance in December means that 214,000 jobs were created in 2016, which translates to a monthly average gain of almost 18,000. This is a solid number, particularly for an economy that only grew at roughly a 1.3 percent pace, but the headline masks weakness in the quality of jobs being created. More than 70 percent of employment growth in 2016 was in part-time positions. The unemployment rate also remained elevated at close to 7 percent over the year. The weakness in labour market conditions reflected the continuing adjustment in the Canadian economy to lower commodity prices – particularly oil. But, as the commodity shock abated, labour market conditions improved, as illustrated by the fact that virtually all the job growth came in the second half of the year.
Value of exports
· Canada’s merchandise trade balance delivered a surprise by swinging from a $1.0 billion deficit in October to a $526 million surplus in November. The value of exports posted a strong increase of 4.3 per cent, but more importantly, increased by 3.5 percent in volume terms. Imports rose a slim 0.7 per cent, while import volumes were down 0.3 percent. This report suggests that merchandise trade likely contributed strongly to economic growth in November and sets the stage for real GDP to bounce back in the month after the 0.3 percent decline in October.
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