Cooling hiring intentions defy view of robust job market

OTTAWA — Add another wrinkle to Canada’s ever-changing employment picture.

Only last week, many analysts were shaking their heads at the irrational exuberance of our labour market.

The admittedly inconsistent monthly employment reports coming out of Statistics Canada have confounded the experts — and Friday’s report was no exception, delivering a count of 95,000 new jobs in May and a lower unemployment rate of 7.1%.

Now, an international recruitment services group is warning that the job market in Canada could be more tepid than those strong gains would imply.

A survey by Manpower Inc., released Tuesday, showed hiring intensions by Canadian employees in the third quarter of 2013 have actually cooled.

On a seasonally adjusted basis, just 9% of employers said they expect to add jobs between July and September, compared to 12% in both the second quarter of this year and the third quarter of 2012, according to the poll of 1,900 Canadian employers. The 9% reading is the lowest since the second quarter of 2010, when the adjusted hiring response was a lowly 7%.

“There’s a downward trend in employment,� Byrne Luft, vice-president of operations at Manpower Canada, said in an interview. “It’s a cautious environment.�

Friday’s job report from Statistics Canada highlighted the strength of the construction sector, in particular, which the federal agency said added 42,700 positions in May, following a flat performance the previous month.

Manpower Inc. said employers in the construction sector expect a “respectable hiring climate� in the upcoming quarter,� with 15% saying they plan to take on more staff.

“We’re seeing some good, promising employment results in the third-quarter forecasts for construction. And obviously, based on May’s stats, when you have half of the 95,000 jobs [being] construction jobs, maybe there’s some merit to that,� Mr. Luft said.

The outlook for manufacturers, however, is less optimistic. Statistics Canada data showed a job loss of 14,200 last month, after gaining 20,600 in April.

The Manpower survey found only 5% of employers in that industry were ready to hire. Compare that to a 23% positive response among transportation and public utilities employers, and 12% in the mining sector.

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Mr. Luft said manufacturing is suffering because “there continues to be offshoring with the durable and non-durable goods.�

“Advanced manufacturing and high-technology type of manufacturing companies are sticking around — for a whole host of reasons: They can’t get the talent abroad, it’s too costly from a transportation perspective. It goes on and on and on,� he said.

“But when you think of all the products that can be offshored and all the pressures, and margins and global competition, employers don’t have a choice but to offshore it. And they are certainly doing that.�

Looking regionally at Canada, Manpower said overall hiring intentions were at a seasonally adjusted 14% in Western Canada, 14% in Atlantic Canada, 9% in Ontario, 7% in Quebec.

Statistics Canada’s monthly labour force reports have been hugely unpredictable in recent months. Its methodology — a survey sampling of households — has come under question for inconsistencies.

Prior to May’s blow-away number, job data showed an increase of only 12,500 positions. That followed a plunge of 54,500 jobs in March and a gain of 50,700 in February.

Economists have cautioned not to read too much into these monthly reports, saying the six-month average of the agency’s employment numbers usually provides a more accurate view of the job market — one of moderate growth consistent with a post-recession economy that has struggled to provide even meager growth.

After weaker-than-expected expansion of 1.8% for all of 2012, the economy turned in a surprisingly strong performance of 2.5% annualized growth in the first quarter of this year.

Still, the Bank of Canada expects growth overall in 2013 will come in at 1.5% — some economists’ estimates are somewhat higher for the current year — followed by 2.8% the next year.

Of course, growth in this country is reliant on an improving recovery in the United States to spur Canadian export growth and business investment.

Manpower’s survey of U.S. employers, meanwhile, found that slightly more than 12% plan to hire between July and September, up one percentage point from the second quarter. More than one-in-four employers in the construction sector said they expected to add staff in the third quarter.

Government statistics show the U.S. economy produced 175,000 jobs in May, up from 149,000 a month earlier, with the unemployment rate edging up to 7.6%.

Europe’s still-worrying fiscal debt situation and the health of the region’s banking system also weigh heavily on the global economy, with Canada not immune to crises outside its borders.

But Manpower’s global survey found on average that employers in 31 of 42 countries surveyed outlook planned to hire next quarter, including Spain and Greece.

Article source: http://www.canada.com/Cooling+hiring+intentions+defy+view+robust+market/8508873/story.html