July Labour Lowdown
16 July 2024
Labour Market Cools – But Positive Signs Are on the Horizon
Toronto’s labour market conditions have now cooled considerably from where they were a year ago. Although the unemployment rate ticked slightly lower to 8.2%, the decline can be attributed fewer individuals participating in the labour force which declined by 0.8% from May. Particularly striking are the nearly 100,000 jobs lost since June of last year. There are, however, some positive signals in anticipation of further interest rate cuts.
The number of job postings in Toronto has increased significantly over the past four months (Job Posting data from TWIG’s Job’s TO System). To date, increases in job postings have served as a fairly solid indicator of future employment rates. TWIG forecasts that Toronto’s employment rates should improve towards the end of the summer, although any predictions are reliant on future interest rate cuts.
Science and Technical Services Continues to Grow
Toronto Region’s Science and Technical Service Sector continues to show remarkable growth. Employers in this sector include scientific and technical including research and development. On a year-over-year basis, employment in the sector has increased by over 13% with the number of job posts going up by almost 20%. Health care employment increased by 8.2% while moderate gains were also seen in both the manufacturing and financial sectors.
Construction and Hospitality Employment Decline
Employment gains in science and health care industries were more than off-set by the sizable losses in both the Construction and Hospitality Sector. Both industries saw year-over-year employment declines of over 8%. Perhaps more unsettling was the decline in job postings. Job ads for construction declined by a whopping 30.2% while hospitality declined by 28.1%. Construction employment in Toronto is unlikely to recover soon as the number of commercial and residential building permits declined over the past several months.
While employment in construction has declined across Canada, Toronto stands in stark contrast to the rest of the country in respect to hospitality and tourism. While most regions of Canada have been adding jobs in this sector over the past 12 months, the number of jobs in Toronto are in free fall. There is some conjecture that the declines in hospitality and tourism can be attributed – at least in part – to the ongoing traffic congestion issues in the downtown core.
Student Employment
In June, the employment rate for returning students in Canada was 46.8%, the lowest rate since June 1998. In Ontario, the unemployment rate for returning students (e.g. summer employment) in June stood at 20.1% which is up by 5.8% from the same time last year. The importance of summer employment for students cannot be understated. Summer employment often offers a valuable glimpse into what it’s like to work full-time for a living and presents insight into what it takes to do well in a chosen field. Other benefits include financial gain and learning about budgeting, saving, and financial responsibility along with soft skills including communication, teamwork, and problem-solving.
Additionally, research shows that summer jobs have positive impacts on academic outcomes, grades, attendance, and work habits.
For employers, summer students can be a strategic move providing inexpensive labour while permanent employees are on vacation. Also, while students can be short-term hires that can provide ‘long-term potential’ and can cultivate a future relationship with someone who could become a valuable permanent employee in the future. As Canada and Toronto’s population continues to age out of the workforce and with future labour shortages, hiring a summer student is likely to be a wise investment for the future.
