Analysis — December 2008

View the most recent version.

Employment declined for the second consecutive month in December (-34,000), the result of a large drop in full-time work. With the drop in employment came a 0.3 percentage point jump in the unemployment rate, which hit 6.6% in December.

Employment growth from December 2007 to December 2008 was 0.6% (+98,000), much slower than the 2.2% (+358,000) observed over the same period in 2007. From the record low of 5.8% in early 2008, the unemployment rate climbed 0.8 percentage points by the end of the year, with most of the increase occurring in the last quarter.

In December, full-time employment losses (-71,000) were partially offset by gains in part time (+36,000). In 2008, all of the employment increases were in part-time work.

December’s employment decline was largely driven by a drop in construction, one of the largest monthly losses for that industry in over three decades. This was partially offset by an increase in transportation and warehousing.

While employment edged down in most provinces in December, Alberta had the largest loss (-16,000). Employment growth in Alberta has slowed considerably in 2008 (+1.3%), after increases above 4% in both 2006 and 2007.

Young people aged 15 to 24 and 25-to-54 year-old men were the most affected by the declines in December, while those aged 55 and over saw an employment increase.

In December, the year-over-year change in average hourly wages was 4.3%, well above the most recent increase in the Consumer Price Index (+2.0%). Hourly wages remain the highest in Alberta, at $24.50, followed by Ontario at $22.40 and British Columbia, at $22.00.

Full-time and private-sector losses

December’s employment loss was the result of a large decline in full-time work (-71,000), partly offset by a part-time increase (+36,000). Most of the decline in full time occurred in Quebec and Alberta.

In December, private sector losses (-59,000) were partially offset by gains in the public sector (+21,000). Over the year, employment was up 1.4% among public sector employees, 0.6% among the self-employed and 0.3% among private sector employees.

Construction falls in December

The construction industry posted a large employment decline in December (-44,000), following two months of little growth. According to the Canadian Mortgage and Housing Corporation, housing starts dipped in November to their lowest level in seven years. Despite December’s employment loss, construction employment remained 4.7% higher than at the start of the year, the result of growth in the first nine months of 2008.

Employment in transportation and warehousing was up 23,000 in December, offsetting a decline the previous month. Despite this increase, employment was only slightly higher in December than 12 months earlier. There was little employment change in December in the other industries.

In addition to the growth in construction in 2008, noted above, employment also increased over the year in professional, scientific and technical services (+4.7%); health care and social assistance (+3.7%) and public administration (+3.5%). At the same time, the following industries lost ground: business, building and other support services (-5.9%); information, culture and recreational services (-4.2%); agriculture (-3.5%); forestry, fishing, mining, oil and gas (-3.0%); trade (-1.7%) and manufacturing (-1.6%).

The decline in manufacturing employment across Canada was less pronounced in 2008 (-32,000) than it had been in 2007 (-130,000), as the continuing decline in Ontario in 2008 was partially offset by increases in Alberta and Quebec. Most of the manufacturing declines in Ontario occurred in the following industries in 2008: food; chemical; plastics and rubber; machinery; and transportation equipment manufacturing. Since the start of the decline in 2002, manufacturing employment in Canada is down 380,000 (-16.3%).

Alberta cools down

Alberta was the only province to show a large employment decline in December (-16,000), all in full-time work. With the drop in employment, the unemployment rate jumped 0.7 percentage points to 4.1% in December, yet remains the lowest in the country.

In 2008, Saskatchewan registered the strongest employment growth in the country (+3.1%). Manitoba (+1.7%) and Alberta (+1.3%) were the only other provinces with employment growth above the national average.

In Ontario, employment growth in 2008 matched that of the national average (+0.6%), with all of the growth in part time. The increase in part-time employment in 2008 was due to a rise in involuntary part-timers – those who prefer full-time work but were unable to find it. Over the same period, Ontario’s unemployment rate was up 0.7 percentage points over the year, to 7.2% in December.

In Quebec, employment was unchanged over the year, while the unemployment rate edged up 0.3 percentage points to 7.3% by December 2008.

In British Columbia, employment also ended the year relatively unchanged (+0.4%), as gains in the first eight months of the year were partially countered by losses in the last four months. This province’s unemployment rate was 5.3% in December, up 1.1 percentage points from 12 months earlier.

Unemployment rate up among youth in December

In December, employment declined for youth aged 15 to 24 (-37,000) and men aged 25 to 54 (-28,000) while increasing among those aged 55 and over (+28,000). The youth unemployment rate increased by 0.6 percentage points in December, to 12.9%.

In 2008, employment fell by 2.0% (-52,000) for youth. The unemployment rate for young people increased by 1.8 percentage points over the same period, more than any other demographic group.

Workers aged 55 and over, on the other hand, posted an employment increase of 4.2% (+109,000) over the year. Despite this employment increase, their unemployment rate also trended up over the year, from 4.7% to 5.6%, the result of an increase in the number of people looking for work.

Quarterly update on the territories

The Labour Force Survey also collects labour market information about the territories. This information is not seasonally adjusted and is produced monthly in the form of three-month moving averages. Comparisons should only be made on a year-over-year basis.

In the last quarter of 2008, employment in Nunavut’s ten largest communities declined by 1,000 compared to the same quarter in 2007, bringing the employment rate down to 58.5% (-7.0 percentage points) and their unemployment rate up 1.6 percentage points, to 9.8%.

There was little employment change in the other two territories over the same period.