The jobs report on Friday humbled most economists with their burst of good news and unexpected rebound in hiring, but Canadian businesses are indicating that some of that cheer may be short-lived.
Recruitment firm ManpowerGroup Canada’s periodic survey on companies’ hiring intentions in the third quarter shows Canadian employers were downbeat on their hiring plans, with 17 per cent anticipating a decrease, 60 per cent forecasting no change, and 12 per cent of employers expecting to increase payrolls.
That may not seem so bad but it was the weakest hiring climate since the survey began in 1978, Manpower said in its survey published this morning.
“With employers in eight of the 10 industry sectors reporting their weakest hiring plans since the 1990s or earlier, slight workforce gains are expected in two sectors, the manufacturing non-durables sector and the services sector,” according to the poll.
Manpower had asked companies about their recruitment intentions till the end of September, compared to the current quarter.
Net employment stood at-10 per cent. Seasonally adjusted net employment outlook declined by 19 percentage points in comparison with the prior quarter and by 21 percentage points when compared with this time one year ago. The net employment figure is derived by taking the percentage of employers anticipating an increase in hiring activity and subtracting it from the percentage of employers expecting to see a decrease in employment in the next quarter.
It’s a sobering indicator after the jobs report on Friday that showed the country clawed back 289,600 jobs in May, but only after it had lost three million jobs over March and April, and with about 2.5 million more people seeing their hours reduced.
The largest companies surveyed in the Manpower poll were the most negative, with 23 per cent looking to cut staff, compared to 17 per cent of the small-sized companies that intended to reduce the workforce.
Companies in Ontario, home to the country’s largest job market, anticipate a net employment outlook of -12 per cent.
Employers in seven of nine industry sectors in Ontario expect a decrease in payrolls during the coming quarter. Hiring plans weakened in most Ontario regions when compared with the previous quarter, most notably by 33 percentage points in both Burlington/Oakville and Toronto, the survey noted.
Western Canadian employers remain the gloomiest amid a commodity-led downturn, reporting a seasonally adjusted net employment outlook of -16 per cent.
“Hiring sentiment weakens in seven of the eight industry sectors when compared with the previous quarter. Steep declines of 57 and 51 percentage points are reported in the construction sector and the mining sector, respectively, while the education sector outlook is 33 percentage points weaker,” the survey noted.
Hiring intentions in Atlantic Canada fell by 9 quarter-over-quarter — the weakest since the survey started regional analysis in 2004. Quebec’s net employment outlook fell 8 per cent.
Overall, among the 10 industries surveyed in the poll, only manufacturing (8 per cent) and services (3 per cent) sectors reported improvement in seasonally adjusted outlook. Companies in construction (down 26 per cent), education (-21 per cent), public administration (-18 per cent) and manufacturing (-18 per cent) remained pessimistic about hiring more staff.
Canadian businesses’ hiring intentions are at the gloomier end compared to the rest of the world. Manpower, which surveys companies across many countries, shows Canadian hiring intentions of -10 per cent placed the country as the 16th most pessimistic out of 43 nations surveyed.
But intentions can change very quickly. September is a long way away in this environment, and a reopening buzz coupled with a virus-vanquishing feat could drive away the gloom quickly — we hope.
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MOURNING FLOYD: Mourners raise their fists during a public visitation for George Floyd, whose death in Minneapolis police custody has sparked nationwide protests against racial inequality, at The Fountain of Praise church in Houston, Texas, U.S., June 8, 2020. Godofredo Vasquez/Reuters
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- Federal Open Market Committee meeting on interest rates begins
- Green parliamentary leader Elizabeth May, representing the Green caucus, and interim Party leader Jo-Ann Roberts, unveil blueprint for a recovery that will drive the transition to the green economy
- Marie-Claude Bibeau, Minister of Agriculture and Agri-Food, to make an announcement to support food security in Canada
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- Oil down on stronger dollar, oversupply concerns
- IBM exits facial recognition business, calls for police reform
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- North America’s largest pipeline company aims to pivot to natural gas and renewable energy
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- World Bank predicts worst recession in 80 years amid coronavirus
- Five-year fixed mortgage rate in Canada falls to 1.99% for first time
- Tesla rallies above February record high on sales recovery in China
- Reopening News: British Columbia, Ontario, Quebec, Saskatchewan
While the stockmarkets are surging, FP columnist Martin Pelletier thinks now is not the time to get caught into the classic FOMO (fear of missing out) whether it be in your monthly budget or your investment portfolio. A little bit of patience and some dry powder will go a long way if the government cheques and consumer spending do not bring us back to where we were economically prior to the shut-down.
Andrew Allentuck tells the story of an Alberta couple fallen on hard times. The couple have $906,000 in assets consisting of their $550,000 home, $355,000 in RRSPs and several old vehicles.
They can’t afford to spend $800 a month on two trucks, a truck camper, one all-terrain vehicle, two sports cars and a fishing boat. Read the predicament here.
Today’s Posthaste was written by Yadullah Hussain (@Yad_Fpenergy), with files from The Canadian Press, Thomson Reuters and Bloomberg.
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