Despite the increase in jobs, manufacturing in Canada continues to face headwinds, including soaring wage increases. PHOTO courtesy Flow Care.
Manufacturing employment climbed by 12,900 (+0.7%) in May, tops among all industries, and the biggest monthly gain since June 2022, government records indicate.
The increase in manufacturing jobs comes as the employment in Canada overall fell by 17,300 (-0.1%) in May, the first decline in nine months.
With this increase, employment stood at 1.81 million in May, surpassing 1.8 million for the first time since January 2018.
“Despite this obvious good news, the manufacturing sector still faces several headwinds that will likely limit job creation over the near term, including ongoing labour and skills shortages and a slowing global economy,” comments Alan Arcand, Chief Economist, Canadian Manufacturers & Exporters.
After holding steady at 5.0% for five consecutive months, the headline unemployment rate for manufacturing rose 0.2 percentage points to 5.2% in May. Meanwhile, the jobless rate in manufacturing moved down one tick to 2.9%.
Despite the decline in employment and increase in the unemployment rate, average hourly earnings still rose by 5.1% year-over-year in May, down only a touch from 5.2% in April.
“This is still uncomfortably high for the Bank of Canada,” says Arcand. “Pay gains remain considerably higher in manufacturing, consistent with a much lower unemployment rate. Indeed, even though wages in the sector posted their biggest monthly drop since July 2022, falling 0.7% in May, they were still up a whopping 8.5% from a year ago. The average hourly wage rate in manufacturing stood at $32.75 last month.”
In the manufacturing sector, employment was up in only 3 provinces in May. The increase was concentrated in Ontario (+20,100), with more modest gains observed in Quebec (+4,300) and Saskatchewan (+1,900). On the negative side, manufacturers in BC shed 5,800 workers in May, the second straight monthly decline. Taking a longer-term view, Alberta’s manufacturers (+14,000) have created the most jobs over the last year, while BC’s manufacturers (-11,000) have shed the most workers.
