Number of New Jobs and their Quality Slowing in Canada: CIBC

Trend likely to continue as public sector hiring softens

TORONTO, Nov. 2, 2011 /CNW/ - The pace of job growth in Canada is slowing and the jobs that are being created are, on average, of lower quality, finds CIBC's latest Canadian Employment Quality Index.

The Canadian economy generated 17,000 new jobs a month on average during the third quarter of 2011, down from 29,000 new jobs a month in the second quarter and 33,000 in the first quarter. The CIBC Employment Quality Index (EQI) fell by 0.5 per cent in the third quarter and is down by 1.5 per cent over the past seven months.

"The decline in our quality index over the past seven months is not so obvious when one glances at the headline statistics," says Benjamin Tal, deputy chief economist and author of CIBC's Employment Quality Index. "During this period, paid employment rose faster than self-employment and full-time job creation outpaced growth in part-time jobs. The reason for the index's decline, despite these positive indicators, is the fact that all the fulltime jobs created during this period were in low-paying sectors.

"Looking ahead, the likelihood is that employment quality in the coming year or so will soften. Key here will be softer public sector hiring in general, and public sector construction activity in particular — a factor that will limit growth in high quality construction jobs in the coming twelve months."

The recent decline in the EQI followed a strong rebound in job quality that began in early 2010. At its current reading, the index is roughly where it was at the eve of the recession.

However, job quality is not uniform across the country. While Ontario, British Columbia and Atlantic Canada weighed down the national number with declines in overall employment quality, Alberta, Québec and Manitoba/Saskatchewan saw improvements over the last seven months.

Full-Time vs. Part-Time Jobs: Full-time employment rose by 1.2 per cent during the past seven months accounting for all of the increase in employment during the period. This factor acted as a positive for the index.

Self-Employment vs. Paid Employment: Paid employment rose by 1.2 per cent vs. only a 0.1 per cent increase in the number of self-employed. This was also a positive contributor to the index over the past seven months.

Compensation: During the past seven months, the number of full-time jobs in high-paying industries fell by 0.1 per cent while the number of jobs in low-paying industries rose by 2.3 per cent. This diverging performance is the sole reason for the recent decline in CIBC's EQI index. The most notable weakness was in high job quality sectors such as the federal government, heavy and civil engineering construction, telecommunications and computer and related manufacturing. Strong job growth in sectors such as machinery manufacturing and professional scientific and technical services helped to limit the damage.

Percentage Change in EQI by Province
Q1-2011 vs. Q3-2011

Province               % Change
Alberta                      1.6
Quebec       1.3               
Man/Sask                   0.9
Ontario                       (0.5)
BC      (1.4)
Atlantic Canada          (4.6)

The CIBC Canadian Employment Quality Index (EQI), 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-20111102.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.

 

 

SOURCE CIBC

For further information:

Benjamin Tal, Deputy Chief Economist, CIBC World Markets Inc. at (416) 956-3698, benjamin.tal@cibc.ca or Kevin Dove, Communications and Public Affairs at 416-980-8835, kevin.dove@cibc.ca.


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