Mixed signals in Canada's labour market as payrolls drop, vacancies hold
For HR professionals keeping an eye on the job market, June 2024 brought a bit of a mixed bag.
According to the latest from Statistics Canada (StatsCan), payroll employment—the number of employees getting a paycheck—took a hit, dropping by about 47,000 positions.
This decline comes after five months of steady gains; but the bigger picture shows that payroll numbers are still up compared to last year, though the pace seems to be slowing down.
On the flip side, the number of job vacancies in Canada remained unchanged in June, holding steady at around 554,000. However, that stability comes after a noticeable drop from where things stood a year ago, when vacancies were significantly higher.
Job vacancies down overall
On a year-over-year basis, job vacancies were down by 190,500 (-25.6%) in June. The job vacancy rate is holding at 3.1%, down from 4.2% in June of last year, signaling a bit of a cooldown in what used to be a red-hot job market.
Month over month, average weekly earnings ($1,253) were little changed in June. “On a year-over-year basis, average weekly earnings grew by 4.0% in June, following a 4.1% increase in May,” StatsCan reports.
“In general, growth in average weekly earnings can reflect a range of factors, including changes in wages, composition of employment, hours worked and base-year effects.”
In June, average weekly hours worked were unchanged compared with the previous month.
Challenges in retail, manufacturing, and construction
June revealed particularly troubled waters for some of Canada's major sectors. Retail trade, for example, was down 15,100 jobs, continuing an overall downward trend that's been in play for over a year.
Sub-sectors like sporting goods and book retailers were among the hardest hit; manufacturing also faced some headwinds, with job numbers down by 18,000 from May, “partially offset” by gains in computer, electronic equipment, appliance and component manufacturing, StatsCan reported.
Industries like wood product manufacturing and furniture production felt the brunt of these declines, which might make finding and keeping talent in these areas a bit more challenging.
The construction sector didn’t fare much better, losing jobs after a solid start to the year. Most industries within construction saw declines, but on the bright side, the sector still holds on to some gains from earlier in the year. Building equipment contractors was the sole industry in the construction sector to record a monthly increase in June.
The number of employees receiving pay and benefits from their employer—measured as "payroll employment" in the Survey of Employment, Payrolls and Hours—decreased by 47,300 (-0.3%) in June 2024. https://t.co/KKx14HogJk pic.twitter.com/0AQtTISxk7
— Statistics Canada (@StatCan_eng) August 29, 2024
Job vacancy trends: What they mean for HR
While payroll employment dipped, the number of job vacancies stayed steady, although it's worth noting that vacancies are significantly lower than they were last year. The job market isn’t as tight as it used to be, with more people competing for each open position.
“There were 2.6 unemployed persons for every job vacancy in June 2024, up from 2.5 in the previous month, largely due to an increase in the number of unemployed persons,” the report stated.
“This was the fifth consecutive monthly increase in the unemployment-to-job vacancy ratio…indicating cooling in the labour market over the period.”
Some sectors are still seeing growth in job vacancies. For instance, administrative support services, transportation, and education are on the upswing. But other areas, like accommodation and food services, are seeing a sharp decline in openings. Vacancies in this sector hit their lowest point since early 2021, which could mean a shift in hiring strategies.
