June 4, 2009
Economic Snapshot — June 5, 2009
Alberta and Ontario lead retreat in construction employment
By John Clinkard, Consulting Economist, CanaData
According to the most recent payroll employment statistics published by Statistics Canada, the two industries hardest hit in the current downturn are manufacturing and construction.
The manufacturing industry saw employment drop from 2.3 million in mid 2002 to its current level of 1.5 million. In contrast, construction employment and total employment both peaked in October 2008. Since that time, total employment has fallen by 325,000 jobs or -2.2%, while the number of construction jobs has dropped by 58,000 or -6.9%.
According to Statistics Canada, job losses in construction can be broken down into three categories: (1) general residential construction, down 12,100 jobs or -9.5%; (2) foundation, structure and building exterior construction, down 10,900 jobs or -10%; and (3) building equipment construction, down 10,300 jobs or -4.6%.
In addition to having a direct effect on construction employment, the recession has caused job losses in construction-dependent industries, such as architectural and engineering services. Employment has fallen by 9,500 jobs (-5.1%) in that sector, by 4,500 jobs (-7.6%) in lumber, millwork, hardware and other building suppliers and by 3,400 jobs (-11.2%) in home furnishings.
Alberta and Ontario accounted for approximately two-thirds of all construction jobs lost in Canada during the past five months. Alberta lost 20,484 jobs (-12.3%), while Ontario lost 20,234 jobs (-7.3%). Despite the extremely hostile economic climate affecting most of the country, construction employment has increased in eastern Canada — in Newfoundland by 5.2%, in Prince Edward Island by 6.4% and in Nova Scotia by 1.1%.
Looking forward, construction employment will probably continue to shrink over the next few months, due to a further gradual decline in business non-residential investment and persistent weakness in residential building. However, moving into the final quarter, construction employment should stabilize and start to expand due to the combined impact of increased spending on government infrastructure projects, a pickup in resource investment and stabilizing residential construction.
John Clinkard has over 30 years experience as an Economist in international, national and regional research and analysis with leading financial institutions and media outlets in Canada.
Percent Change in Total Employment and Construction Employment by Province –
October 2008 to March 2009
Data source: Statistics Canada/Chart: Reed Construction Data – CanaData.
