Canada’s labour market is expected to tighten over the next year as hiring picks up

OTTAWA — Canada’s labour market is expected to tighten over the next year outside of the energy-dependent Prairie provinces, a Bank of Canada survey said on Monday, with some businesses now planning to add staff to meet supply and production demands.
Results of the central bank’s quarterly business survey revealed business sentiment is broadly positive while expectations for future sales growth “remain positive.”
The survey found business concerns around trade tensions had declined somewhat, with foreign demand, particularly from the United States, still lifting export prospects.
The fourth-quarter business survey was released less than two weeks before the Bank of Canada’s next interest rate decision, scheduled for Jan 22.
Canada’s central bank has held its benchmark rate steady since October 2018, even as several of its international counterparts have eased. Money markets see little chance of a rate cut next week.
Of the companies surveyed, 39 per cent said labour shortages were more intense while 14 per cent said labour shortages were less intense. In the previous survey the balance was 34 per cent to 12 per cent.
Firms reported shortages of specialized labour, like skilled trades and engineering, as well as in lower-skilled jobs. Hiring plans, the Bank’s survey found, “are widespread across most sectors” with those plans primarily concentrated among firms in Quebec and British Columbia, where the labour shortages are most acute.
Monday’s survey also found firms see “some signs that energy sector activity may have bottomed-out as production limits are gradually removed and some progress is made on pipeline capacity.”
Of the companies surveyed, 43 per cent expected sales to grow at a faster rate than in the past 12 months, while 32 per cent predicted a lesser rate of sales growth. In the previous survey, the balance was 48 per cent to 25 per cent.
Meanwhile, expectations for U.S. economic growth have recovered slightly, the survey noted, adding fewer firms anticipate a U.S. recession.
© Thomson Reuters 2020