The tight labour market conditions continue to put upward pressure on wages, particularly in manufacturing. PHOTO by Pexels.
Manufacturing employment climbed by 2,800 (+0.2%) in April, up for the third time in four months.
Despite the recent employment gains, however, the sector has created only 3,700 jobs over the last 12 months, points out Alan Arcand, Chief Economist, Canadian Manufacturers & Exporters.
“This tepid pace of job growth is consistent with a sector that is being held back by slower demand for consumer goods amid sharply higher interest rates and the ongoing post-COVID swing from spending on goods to spending on services,” Arcand says.
On a provincial basis, manufacturing employment was up in five provinces in April. Ontario (+5,000) was responsible for the bulk of the increase in hiring, with other notable gains reported in PEI (+200), New Brunswick (700), and Alberta (1,500). Gains in those provinces were partially offset by a loss of 2,300 manufacturing jobs in Saskatchewan, the biggest monthly drop since April 2022, Arcand notes.
“Taking a longer-term view, Alberta’s manufacturers (+15,600) have created the most jobs over the last year, while BC’s manufacturers (-18,000) have shed the most workers,” Arcand says.
Looking at employment for the Canadian economy as a whole for the month of April, it rose by 41,400 (also a 0.2% gain), the eighth straight monthly increase.
For the fifth consecutive month in April, the headline unemployment rate held steady at 5.0%, remaining just a hair above the record low of 4.9% reached last June and July. Meanwhile, the jobless rate in manufacturing inched up from 2.9% in March to 3.0% in April, only 0.4 percentage points above the all-time low.
As would be expected, the tight labour market conditions continue to put upward pressure on wages. Average hourly earnings rose 5.2% on a year-over-year basis in April, down only a touch from 5.3% in March.
“Pay gains remain considerably higher in manufacturing, consistent with a much lower unemployment rate,” Arcand says. “Indeed, wages in the sector were up a very elevated 7.2% year-over-year in April, a modest slowdown from the 7.4% increase seen in March. The average hourly wage rate in manufacturing came in just shy of $33 last month.”