The pace of job creation is slowing in Canada, hammered by the sharp rise in interest rates, but that is yet to hold back companies from hiring as they face a tight labour market that has pushed the unemployment rate to a record low.
Statistics Canada is set to release its latest jobs data on Friday, and a Reuters poll forecast employment in July to rise by a net 20,000 jobs, with the unemployment rate ticking up to 5% from 4.9% after 43,200 jobs were lost in June.
Canada’s strong employment market has often been cited as a reason why its economy may avoid a short-lived recession.
That is encouraging companies to keep hiring.
Air Canada (AC.TO) is hosting a virtual job fair to attract talent as it seeks to benefit from the post-pandemic travel rebound.
“We’re not seeing any evidence of a slowdown,” Air Canada Chief Executive Mike Rousseau said on Tuesday about travel demand, when asked about a possible economic downturn.
Data from financial information company S&P Global on Tuesday showed that the pace of job creation in Canada’s manufacturing sector slowed in July. But the economy has become less reliant on goods production in recent months, with activity shifting to the services sector after provinces lifted restrictions to curb the spread of COVID-19.
Job vacancies reached a record high of 136,800, up 5.0% from the peak of the fourth quarter of 2021, StatsCan said in July.
“Currently, the automotive industry in Canada is facing a 10% shortage in labour and have relied on temporary arrangements and recruiting,” Flavio Volpe, president of Canada’s Automotive Parts Manufacturers’ Association trade group, said in a phone interview.
Forecasts of cooling economic growth have not affected demand for labour in Canada’s aviation hub Quebec, where industry needs to fill 38,000 positions between now and 2032, aerospace trade group Aero Montreal said.
“We are in full growth mode,” said Aero Montreal President Suzanne Benoit. “We don’t have enough workers to deliver what we have in our order books.”
Grant Stevens, chief corporate services officer at British Columbia-based KF Aerospace, which does heavy maintenance and modifications for commercial aviation, echoed the sentiment.
“Demand continues to outstrip supply in supporting airline operations,” Stevens said.
Among retailers, Walmart Canada, a unit of Walmart Inc (WMT.N), and Lowe’s Canada, a unit of Lowe’s Cos Inc (LOW.N), are seeking skilled workers. Grocer Loblaw Cos Ltd (L.TO) last week said that availability of labour in some distribution centers was a challenge.
Wal-Mart Canada Corp is offering thousands of part-time associates new full-time roles despite rising costs of goods and fuel, said Corporate Affairs Manager Felicia Fefer.
StatsCan said the drop in June’s employment was mostly among older workers and it estimates that 55% of people aged 60 and above are working out of necessity rather than choice.
Derek Holt, vice president of capital markets economics at Scotiabank, said that proportion is unlikely to go down as borrowing costs rise and the possibility of a recession looms.” “So, a recession could delay retirement choices, which tends to be the pattern,” Holt said.