Market Overview
Labour Force Survey: ‘A Breath of Fresh Air’
The Canadian Economy gained 90,000 jobs in April, much higher than the average of 20,000 jobs economists were predicting. Employment growth over the past year has been at least partly driven by the public sector, but April's numbers were an encouraging move.
Employment in Canada rose by 27,000 jobs in May to a total of 20.5 million. May’s employment growth was driven by part-time positions, which increased by 62,000, while full-time jobs declined by 36,000.
The employment rate—or the proportion of the population aged 15 and older who are employed—declined 0.1 percentage points to 61.3% in May, the seventh decrease in the past eight months. Compared with its recent high of 62.4% reached in January and February 2023, the employment rate has fallen 1.1 percentage points, as population growth outpaced employment growth.
The unemployment rate was 6.2% in May, up 0.1 percentage points in the month and 0.9 percentage points on a year-over-year basis.
Caroline Hache Managing Director Vaco
“Reflecting on the labour force data for the second quarter, it is encouraging to see the Canadian economy demonstrating resilience and adaptability in the face of ongoing challenges. The substantial job gains in April reflects a significant positive shift. This increase provides a much-needed boost of confidence in our economic recovery trajectory.
However, the mixed nature of employment growth in May, with part-time jobs increasing significantly while full-time positions declined, highlights a nuanced labor market landscape. It suggests that while job creation is robust, there is a shift in the types of employment opportunities being generated, which could have longer-term implications for job stability and income security for many Canadians.
The slight decline in the employment rate and the rise in the unemployment rate, although modest, remind us that population growth continues to outpace job creation. This disparity points to the need for sustained efforts in creating high-quality, full-time employment opportunities that can support a growing workforce.
Overall, while there are encouraging signs of recovery and resilience, particularly with the impressive job gains in April, the data also calls for a cautious optimism. It highlights the importance of strategic policies and initiatives to support continued job growth, particularly in creating stable and full-time positions, to ensure a balanced and sustainable economic recovery.
In summary, the labour force data for Q2 is a breath of fresh air, revealing both the strengths and the areas needing focus in our journey towards full economic recovery. The positive trends are promising, but they also underscore the ongoing challenges that need to be addressed to ensure inclusive and sustained growth for all Canadians.”
Market Overview
Canadian Staffing Index
The Canadian staffing index—which reflects the volume of labour supplied by temporary staffing agencies in Canada—was 78 in April, down 3.7% versus April 2023. Month-over-month, the index was up 2.6%.
Kevin Jeewan Managing Partner Vaco
“We have observed a notable shift in the types of roles our clients are prioritizing. As businesses continue to adapt to an ever-changing economic landscape, there's a growing demand for positions that drive innovation and operational efficiency. For instance, we have seen a surge in requests for roles in data analytics, cybersecurity and digital transformation. These positions are crucial as companies strive to leverage technology to gain a competitive advantage. Additionally, there is a significant focus on roles that enhance customer experience and streamline business processes, reflecting an overarching trend towards digital-first strategies.
As organizations seek to attract top talent and adapt to evolving workforce and market trends, agility and efficiency will be the name of the game—and businesses are increasingly investing in roles that provide these critical attributes and enhance organizational resilience.”
Market Overview
Recession Watch 2024
‘Economic Outlook Canada Q2 2024: Staying Subdued’
- GDP growth in Canada will remain sluggish in coming quarters as higher interest rates continue to work through the economy, with an expected GDP growth of 0.9% in 2024, up slightly from the 0.7% forecast in November 2023.
- The forecasted unemployment rate is expected to average 6.1% in 2024.
Source: S&P Global
Canada's economic growth misses estimates, becomes first G7 nation to cut interest rates
- The GDP rose 0.2% in February, less than analysts' estimates of 0.3%, while growth in March likely remained muted.
- The inflation rate ticked up to 2.9% in March year-over-year, up slightly from February’s 2.8% year-over-year increase.
- The consumer price index rose 0.6% in March on broad-based price growth, but only 0.3% after adjusting for seasonal effects.
- In June, the central bank reduced rates to 4.75% from 5%—the first cut in four years.r.
Source: Reuters—Canada's economic growth misses estimates, Forbes, Reuters—Canada cuts interest rates
Sean Bartunek Managing Partner Vaco
“As we navigate through 2024, the economic landscape presents a mixed bag of challenges and opportunities for the Canadian talent market. While GDP growth remains sluggish and unemployment hovers around 6.1%, businesses are feeling the pressure of adapting to these conditions. The recent interest rate cut by the Bank of Canada indicates efforts to stimulate the economy, but inflation continues to impact consumer prices, influencing both employer costs and worker expectations.
In this environment, companies must stay agile, especially in their approach to talent acquisition—both of full-time employees and contractors. Job seekers are prioritizing stability in the form of full-time employment and/or long-term contracts with the opportunity to extend. Competitive compensation is also incredibly important. At the same time, employers are looking for ways to balance budget constraints with the need for talent. Onshore, nearshore and offshore solutions, in addition to how technology can plug in to create more efficiency, are the topics of the day. We continue to be cautiously optimistic about how this year will play out, but 2024 is not without its challenges.”