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Wednesday, February 1, 2012

Canadian Job Market Weakest Ever - CIBC Says

The latest data show that the employment market in Canada is the weakest it’s ever been.
According to a CIBC index more and more Canadians are working for themselves.  Many fewer are able to secure full-time employment, the rate of which has slowed down considerably. The loss of jobs is made worse by the lessening of the quality of the few jobs that are available.
The employment quality index has fallen over one whole point from 2011. Year-over-year, the greatest drops were seen in Ontario, and the greatest growth in employment was seen in Alberta.

CIBC says that the “quality and quantity of jobs are falling in tandem.”  The surge of self-employment does much to mask the health of the overall economy, as these jobs are often less stable, and produce less revenue.

The report says, “From a quality perspective, the surge in self-employment reduces the overall quality of employment—largely due to the fact that, on average, a self-employed person earns 10%-15% less than a regular employee.”

CIBC warns too that, while the Real Estate market is not expected to crash, they fully expect it to slow down, the impact of which will be substantial on the overall economy.

“While a housing market crash is not in the cards, it’s likely that real estate activity will level off soon. But even if house prices land softly, the impact on the economy in general, and construction jobs in particular, will be far from gentle. Real estate has been an important engine of economic activity, with the number of high quality construction jobs rising by 3.5% in 2011.

That is more than double the pace of employment gains seen in the economy as a whole. That momentum will be lost when the housing market levels off,” the report says.
With the economy expected to soften as well, CIBC feels that prospects for a robust employment picture in the short term are few.