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Canada’s economy was a job-creating machine in the first six months of 2012, adding 155,000 new positions in that time. Better yet, many of those positions were high-paying and full time.
But economists say Canadians should prepare themselves for a much bleaker second half of the year.
“The slowing global economy means that export-oriented high-paying jobs will not be as plentiful while a moderating real estate market will soften job creation in the construction sector,” says Benjamin Tal, economist at CIBC World Markets, in a recent note to clients. “Add to it the impact of public sector downsizing and you have a sure-fire recipe for a slowing trajectory of employment quality in the coming quarters.”
Last Friday’s jobs report was the most recent evidence pointing to a slowdown in the labour market. Canada produced just 7,300 net new jobs in June, following 7,700 positions added in May.
That’s in sharp contrast to the 82,000 jobs added in March and 58,000 in April.
Tal adds that more than just producing jobs in the first six months of 2012 was the quality of those jobs. Full-time positions increased 1.1 percent – 10 times the pace of part-time employment -- and accounted for 97 percent of all jobs created in that period.
Many of those jobs were full-time positions in high paying sectors such as the oil and gas industry, construction and manufacturing. High paying positions increased collectively by 1.6 percent -- twice the pace of low-paying jobs.
And the number of salaried employees increased 1 percent during that time, far higher than the 0.1-percent growth in self employment.
Tal concludes though that these employment trends “are unlikely to last.”
Other economists say that not only will Canada’s labour market stall, the unemployment rate will increase by the end of the year.
“We expect further modest employment gains ahead, with the unemployment rate drifting higher, reaching 7.5 percent by year-end,” says David Madani, economist at Capital Economics. “With the euro-zone on the cusp of a deep recession, the U.S. economy struggling and the Chinese economy slowing, the outlook for economic growth and employment in Canada has deteriorated.”