The latest employment numbers released today show that Canadian businesses are doing more hiring, although the trend is expected to downshift before picking up again, according to BMO Capital Markets.
Canadian employment rose by 22,300 in May, up 1.6 per cent from a year ago.
“The solid May report is good news amid a run of downbeat economic data, such as weak U.S. employment growth, poor weather across much of the country and a big drop in auto production resulting from supply-chain issues,” said Robert Kavcic, Economist, BMO Capital Markets.”
Kavcic noted, however, that growth is likely to downshift substantially in the second quarter before picking up again in the second half of the year.
“Across the country, the outlook among business owners is cautious, but optimistic,” said Gail Cocker, Senior Vice-President, Commercial and Treasury Management, BMO Financial Group. “We are encouraged by the increasing number of firms willing and able to invest in their operations, whether it is hiring or upgrading equipment, to improve their productivity.”
Full time jobs were up 32,900 and private-sector employment added 37,100, offsetting a hefty drop in the public sector, although self-employment was up nearly 30,000.
The public sector shed 44,300 jobs in the month, likely due to a falloff after the May 6th election, which likely contributed to the strong 20,600 pace of public hiring in April.
Manufacturing employment fell 22,500, the third consecutive monthly decline. Canadian auto production was cut nearly 17 per cent in April, and bounced back only a modest 2.5 per cent in May – the bulk of the manufacturing declines
(-15,500) were centered in auto-heavy Ontario. The notable gainers picking up the slack were trade (34,400), culture and recreation (14,500) and health care (14,100). Education was another weak spot, down 26,800.
Ontario was the biggest weak spot, giving back 16,100 of the hefty 54,800 increase in jobs seen in the prior month. Manufacturing dropped by more than 15,000 as the auto sector clearly had an impact.
Modest declines were also seen in Newfoundland (-2,700) and New Brunswick (-1,400), while all other provinces saw job growth in the month.
Quebec led the charge with a 24,800 advance.
The jobless rate performance was mixed across the country, with B.C., Alberta and Quebec seeing the largest declines, while Ontario held steady at 7.9 per cent despite the drop in manufacturing jobs.
There was a noticeable divide between jobless rates in the Prairies and the rest of Canada: Alberta (5.4 per cent), Saskatchewan (5.0 per cent) and Manitoba (5.3 per cent), while the next lowest jobless rate is the 7.6 per cent found in British Columbia.