2010 to bring more jobs, but return to hot labour market a long way off

OTTAWA — Canadian workers will be a little more in demand and can be a little less fearful about job security in 2010, economists and employer surveys say.

OTTAWA — Canadian workers will be a little more in demand and can be a little less fearful about job security in 2010, economists and employer surveys say.

Two employer surveys — one from CareerBuilder.ca released Wednesday and one from manufacturers released Tuesday — are remarkably similar in forecasting modest job growth next year.

“Companies say they will add more employees to their payrolls in 2010, a trend that will be widespread across most provinces and industries,” said Hunter Arnold, managing director of CareerBuilder, an online job site.

The survey of 255 private sector hiring managers and human resources officials found half expecting to stand pat in 2010. But it also found that 29 per cent planned to add full-time employees, with only nine expecting to shed staff.

The results are in line with the Canadian Manufacturers and Exporters poll of its members that found most — by a 27-17 margin — planned to add workers rather than trim staffing levels.

Following November’s surprising 79,000 job gains — 39,000 full-time — economists have come around to the view that while there may the occasional monthly blip, the long-term trend in the jobs market has turned a corner and will be positive going forward.

Economists say Canadians should count their blessings, small as they are.

A year ago, the TD Bank was one of several forecasters predicting about 500,000 Canadians would be idled in 2009. With December’s numbers still to come, the losses so far this year total 237,000.

“If you were looking at the fall of 2008 and the early part of 2009, it looked like the abyss,” explains TD economist James Marple.

”But what happened is our domestic economy performed really well on the strength of the lower interest rate environment, and that helped put a floor under the job market,“ he said. ”Where we did see losses were in the (export) sectors exposed to the U.S. downturn.“

Another surprise, said Toronto economist Dale Orr, is that job deterioration slowed and appears to have stopped a lot earlier than most believed. Finance Minister Jim Flaherty had been warning as recently as a few months ago that labour markets would lag the recovery.

Instead, employment appears to be picking up in tandem with the economy.

The TD Bank now estimates about 280,000 new jobs will be created next year, a forecast roughly in line with other private sector projections.

That is still a long way from the hot labour market of 2007 and 2008 when employers were competing with each other for scarce workers.

It may take years before that situation to return, even with the aging workforce.

Statistics Canada estimates the labour market, or the number of potential workers, is increasing by about 300,000 annually, so employment would have to rise by close to one million in the next two years just to get back to situation that existed before the recession.

“It’s possible we’ve already seen the worst rate of unemployment, but we’ve got to have big increases in employment for a quite a few months just to get back to the levels of early 2008,” noted Orr.

Perversely, another worry is that Canada didn’t shed enough jobs during the slump for its own good, added Orr.

He notes that while employment in Canada is now 320,000 below pre-recession levels, by comparison the U.S. downloaded more than eight million workers while suffering roughly similar output reductions. That means the average U.S. employee became more productive that his Canadian counterpart during the slump.

“It isn’t sustainable to have increases in employment without a proportional output gain,” Orr said. “Something has to give. Either corporate profits have to fall, or wages have to fall or there have to be layoffs.”

Union economists have argued something is already giving in that many new jobs in Canada are occurring in the lower-paid services sector, which has seen a 38,000 jobs gain in the past year.

Meanwhile, the better-paying manufacturing sector has shed more than 170,000 workers during the period.

As well, the CareerBuilder survey shows employers are reluctant to raise the salary levels of their employees at the moment, with only half saying they expected to increase compensation in the next three months.

Meanwhile, 42 per cent said they plan to replace current low-performing workers with better performing ones, which would not equate to a net job gain.

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