Manufacturing Sector Labour Market
Manufacturing employment exploded in November. The addition of 30,400 new positions represents the single largest monthly increase in manufacturing jobs in Canada in almost 16 years. Driving gains was the end of the GM strike in Ontario, combined with the fact that the company itself ramped up production in November to make up for its low inventories that were depleted during the work stoppage.
Even though some of the spike may prove to be temporary, the increase in employment is unambiguously good news for a sector where the number of jobs has been flat or declining for years. Through 11 months, manufacturing employment is tracking 1.5 per cent higher compared to the same period in 2016. There are now just under 1.8 million Canadians employed in manufacturing – the highest number since the summer of 2012.
The one bit of bad news is that the spike in employment has driven the jobless rate in manufacturing down to dangerous levels. Unemployment in manufacturing has always been well below the all-industry average, but strong job growth and relatively few entrants into the manufacturing labour force have squeezed businesses that were already contending with chronic labour and skills shortages. In the last 12 months, the unemployment rate in manufacturing has fallen from 5.0 per cent to just 2.6 per cent. That jobless rate is well below what is usually considered to be “full employment” and could result in severe labour shortages or wage inflation if it continues for any length of time.
Across Canada, manufacturing jobs gains were fairly widespread with employment up in seven provinces and down in three. However, the lion’s share of new jobs was in Ontario and Quebec. In Ontario, for reasons already mentioned, manufacturing employment rose by 15,300 jobs, while another 13,100 were added in Quebec. BC, Manitoba, and New Brunswick were the only provinces where the number of manufacturing jobs fell in November.
With just one month left in 2017, Saskatchewan is poised to be Canada’s manufacturing job growth leader for the year. Through November, manufacturing employment in the province is up 9.8 per cent compared to last year. There have also been considerable gains in PEI (6.8 per cent) and Nova Scotia (5.0 per cent). Only Quebec and Newfoundland and Labrador are likely to have had fewer manufacturing jobs in 2017 compared to 2016.
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