Alberta leads the country in February job losses
Low commodity prices is finally starting to take a toll on the Canadian labour market. The latest February employment report from Statistics Canada shows a softening job market in resource-heavy Western Canada.
Despite the lower loonie, manufacturing was still the biggest loser, shedding 19,000 jobs in February, mostly in Alberta and Ontario. The natural resource industry, which includes oil and gas, mining and forestry, was a close second with 16,900 job cuts. Approximately 7,000 of those jobs were located in Alberta while 7,200 were lost in BC.
So where were all the job gains? Not surprisingly, the public sector posted the highest gains, mainly in education and health care, which increased by 24,300 jobs last month. Construction is also still going strong in Canada, gaining 15,500 jobs last month and a whopping 56,100 jobs in the past year. Residential and commercial construction remains one of the strongest sector of the Canadian economy, particularly in the major urban areas.
Alberta lost 14,000 jobs in February sending the unemployment rate up to 5.3% (from 4.5% in the previous month). This is the highest number of job losses in the province since September 2011. In fact, all provinces outside of Quebec and Ontario shed jobs last month.
On a year-over-year basis, Alberta is still leads the country in job growth and migration given its population of only 4 million people (compared to 8 million in Quebec and almost 14 million in Ontario). However, low commodity prices will likely hurt future job and population growth in the province.
Drilling down into the numbers, the Wood Buffalo/Cold Lake region, which includes Fort McMurray, saw the sharpest provincial job losses. Wood Buffalo's labour force increased by 2,800 people despite 2,000 job cuts in the area. As a result, Fort McMurray's unemployment rate jumped from 4.1% (one of the lowest in the country) to 6.6% in February.
Bigger cities, such as Calgary and Edmonton, seemed to be buffered from any serious losses in February. Significant job gains in both cities were outweighed by increases in the workforce, causing the unemployment rate to rise to 4.9% in both cities. Professional workers (including engineers and scientists) were not spared from provincial job losses last month. The Calgary retail sector was also hit hard in February.
Analysts expect the unemployment rate to continue to rise through the spring. Alberta will be especially susceptible as construction winds down at several major oil sands projects and the spring drilling season will likely be very quiet this year.
Overall, the Canadian job market was relatively flat, losing only 1,000 jobs last month. However, Canada's unemployment rate jumped from 6.6% to 6.8% largely due to more people entering the labour force.
By comparison, the US unemployment rate is 5.5%, however, the US calculation excludes much of the younger population (whereas everyone over 15 years of age is accounted for in Canada). If using the US unemployment calculation formula, the Canadian unemployment rate would be 5.9%, still slightly higher than the US.
Most interestingly, the US employment numbers have seen significant improvements in the past year, while Canada's job market has been relatively stagnant in the past 12 months. The Bank of Canada remains hopeful that a strengthening US economy and weak Canadian dollar will be enough to power the manufacturing industry in Quebec and Ontario, making up for any slow-down in the commodities and energy sectors.
The full February employment report can be found on the Statistics Canada website [click here for link].