Canadian manufacturers have now added jobs for three consecutive months, a rather surprising development given the challenging economic backdrop. PHOTO courtesy PLZ.
Employment in Canada’s manufacturing sector climbed by 27,300 (+1.5%) in June, the biggest monthly gain since September 2020, government data shows.
Employment in the sector stood at 1.836 million last month, the highest level since December 2008.
“Manufacturers have now added jobs for three consecutive months, a somewhat surprising turn of events given the challenging economic backdrop,” commented Alan Arcand, Chief Economist,
Canadian Manufacturers & Exporters. “Indeed, despite the recent strong run, the manufacturing sector still faces several headwinds that should limit job creation over the near term, including ongoing labour and skills shortages and soft global demand. It is also worth noting that manufacturing employment remains about half a million below its November 2002 peak.
Taking a regional look, manufacturing employment was up in six provinces in June. The largest absolute increase was seen in Quebec (+11,900), while the biggest proportional gain was posted in Saskatchewan (+1,800). Taking a longer-term view, Ontario’s manufacturers (+35,000) have created the most jobs over the last year, while BC’s manufacturers (-15,000) have shed the most workers.
The headline unemployment rate in manufacturing rose 0.2 percentage points to 5.4% in June, following an identical increase in May. This brought the rate to its highest level since February 2022 when it was also 5.4%. Meanwhile, the jobless rate in manufacturing remained unchanged at 2.9%, just 0.3 percentage points above its record low.
The rise in the headline unemployment rate is easing pressure on wages. Average hourly earnings were up 4.2% year-over-year in June, down from 5.1% in May and the slowest gain in 13 months. Still, this is well above the historical average of 2.9%.
“As has been the case for most months since late 2021, pay gains were considerably higher in manufacturing, consistent with relatively tighter labour market conditions. While wages in the sector fell for the second consecutive month in June, the year-over-year increase still came in at an elevated 6.5%,´ Arcand says.