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
The CIBC Canadian Employment Quality Index (EQI), combines information
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
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For further information:
Benjamin Tal, Deputy Chief Economist, CIBC World Markets Inc. at (416) 956-3698, firstname.lastname@example.org or Kevin Dove, Communications and Public Affairs at 416-980-8835, email@example.com.