Tuesday, February 10, 2004

SPOTLIGHT: Labour market

Only modest gain in employment last year

Employment surged ahead during the last four months of 2003, salvaging at least a modest improvement from 2002.

In total, the economy created 278,000 jobs in 2003, most of them between September and December. This was only one-half the total increase in employment of 560,000 in 2002. On the bright side, much of the gain in the last four months of 2003 was in full-time work.

The year got off to a slow start. Job gains during the first eight months were minimal. Over the year, the economy was rocked by a rapidly rising Canadian dollar, and probably to a lesser extent by war in Iraq, the SARS scare and the mid-August power blackout.

The last such sustained period of weakness in the labour market occurred in 2001, when Canada only narrowly avoided a recession.

For 2003 as a whole, the unemployment rate averaged 7.6%, down slightly from 7.7% in 2002. With participation rates also at record highs throughout the year, the unemployment rate rose at the start of 2003, when job gains were weak. By the end of the year, the rate was down.

After a spectacular job-creating performance in 2002, the manufacturing sector fell prey to the rising dollar, among other factors, which made Canadian goods more expensive for American customers.

On average, 2.3 million people were employed in manufacturing in 2003, down 1.4% from 2002. This decline had a significant impact on the country's overall employment trend. Gains in employment outside manufacturing rolled along at 2.9%, a pace similar to the previous year.

The weakness in manufacturing was concentrated in computer and electronic equipment, as well as in transportation equipment. Almost all the decline in manufacturing occurred in Ontario and Quebec.

Back-to-back growth in self-employment

On the bright side, the labour market was buoyed by housing construction, where activity was robust. Added construction and real estate jobs led to a second consecutive gain in self-employment.

On average, 2.4 million people were self-employed last year. Prior to the back-to-back gains, self-employment had been on a downward trend.

With spending on health care tracking upward, employment in health care and social assistance continued to grow last year, much of it concentrated in Ontario and Quebec. Another big source of jobs was public administration.

Employment grew in every province, except New Brunswick. The strongest gains occurred in Alberta, driven by hiring in the oil patch and in retail and wholesale trade, and in Ontario, despite weakness during summer in the Toronto area.

The article "The labour market in 2003" is available in the January 2004 online edition of Perspectives on Labour and Income.

For more information, contact Geoff Bowlby (613-951-3325), Housing, Family and Social Statistics Division.

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© 2004, Statistics Canada.