Trend unlikely to continue as global economy and Canadian real estate
TORONTO, July 12, 2012 /CNW/ - The Canadian economy saw solid job
creation in the first half of 2012, with many of those jobs being in
high-paying sectors, but a slowing global economy likely means a drop
in both the number and quality of new jobs in the coming quarters,
finds CIBC's latest Canadian Employment Quality Index.
"The good news is that the Canadian economy created 155,000 new jobs in
the first six months of 2012," says Benjamin Tal, deputy chief
economist and author of the CIBC index. "The even better news is that
these jobs were of high quality. These trajectories, however, are
unlikely to last. The slowing global economy will work not only to
soften the pace of jobs creation in the coming quarters, but also
decrease the quality of the jobs that are created."
The CIBC Employment Quality Index, which combines information on the
distribution of part-time vs. full-time jobs; self-employment vs.
paid-employment; and the compensation ranking of full-time paid
employment jobs, rose by 1.2 per cent during the first half of 2012 and
is now back to its pre-recession level.
The report notes that full-time employment rose by 1.1 per cent during
the first half of the year — ten times faster than growth in part-time
employment, while accounting for 97 per cent of all jobs created during
"More importantly, the number of full-time paid employees in high-paying
sectors such as petroleum and coal manufacturing, oil and gas
extraction, heavy and civil engineering construction and transportation
equipment manufacturing, rose by 1.6 per cent in the first six months
of the year," notes Mr. Tal. "That is more than double the pace seen in
low-paying sectors such as miscellaneous manufacturing, wood product
manufacturing, textile product mills and electronics and appliance
Another positive trend over the last six months was the growth of paid
employees. The number of these workers rose 1 per cent during the first
six months of the year vs. a growth rate of only 0.1 per cent among
self-employed. On average, the self-employed earn less than 80 per cent
of the income of paid employees.
By province, the most significant improvement was in British Columbia.
Close to 90 per cent of jobs created in the province in the past six
months were full-time. The sectoral composition of employment has also
improved with strong gains in high-paying sectors such as utilities,
manufacturing and finance.
Although Ontario lagged the nation in the pace of job creation in the
first half of the year, the jobs that it managed to create were of
relatively high quality. Strong advances in the utility and financial
sectors played a role but key was the 4 per cent increase in
manufacturing employment led by high-paying subsectors such as computer
and electronics, electric equipment and mineral manufacturing.
While job creation in Québec outpaced all other provinces in the first
half of the year, the overall quality of employment fell modestly
during that period, slightly eroding the positive impact on income
growth in the province.
"The high volatility of recent job market statistics can make any
observer dizzy, but the consistent trend of improvement in our
employment quality index over the past six months was a pleasant
surprise," adds Mr. Tal. "Combined with the recent acceleration in
average wage gains, this should lead to a relatively strong pace of
income growth in the second quarter.
"As for the future, unfortunately the recent improvement in job quality
will be short-lived. The slowing global economy means that
export-oriented high-paying jobs will not be as plentiful while a
moderating real estate market will soften job creation in the
construction sector. Add to it the impact of public sector downsizing
and you have a sure-fire recipe for a slowing trajectory of employment
quality in the coming quarters."
The CIBC Canadian Employment Quality Index combines information on:
the distribution of part-time vs. full-time jobs;
self-employment vs. paid employment;
and the compensation ranking of full-time paid employment jobs in more
than 100 industry groups
The complete CIBC World Markets report is available at: http://research.cibcwm.com/economic_public/download/eqi-cda-20120712.pdf
CIBC's wholesale banking business provides a range of integrated credit
and capital markets products, investment banking, and merchant banking
to clients in key financial markets in North America and around the
world. We provide innovative capital solutions and advisory expertise
across a wide range of industries as well as top-ranked research for
our corporate, government and institutional clients.
For further information:
Benjamin Tal, Deputy Chief Economist at 416-956-3698, email@example.com or Kevin Dove, Head of External Communications at 416-980-8835, firstname.lastname@example.org.