Job Termination
Ontario job rate keeps growingThe pace of job growth across Canada geared down in March, but Ontario continued to speed ahead. The Canadian jobless rate fell to 7.3% in March, down from 7.4% in February, with a net gain of 14,200 positions. MARYANNA LEWYCKYJ |
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 [ 2003-04-09 ] |
However, Ontario outperformed the national average, adding 17,000 jobs in March to shave the provincial jobless rate to 6.5%, down from 6.7% in February.
The robust provincial showing was achieved despite a dismal month for manufacturing jobs, traditionally a backbone of the Ontario economy.
A total of 37,200 factory jobs disappeared across Canada in March, marking the fifth monthly decline in the past seven months.
"Manufacturing is now one of the weakest sectors of employment, and yet Ontario's doing just fine," said Douglas Porter, senior economist at BMO Nesbitt Burns.
"It just shows the service sector is doing well and strong enough to offset the weakness in manufacturing."
U.S. influence
For the first quarter of 2003, Ontario added 71,000 jobs, up from an average quarterly gain of 49,000 in 2002.
"I have to admit I'm surprised by how well Ontario is holding up," said Porter, noting the province's proximity to the U.S. makes it more susceptible to downturns south of the border.
Figures released last Friday show the U.S. shed 108,000 jobs in March after huge cuts the month before. The overall U.S. jobless rate held steady at 5.8% in March.
Porter warns that the March jobless survey was taken in the middle of the month, so it wouldn't show the effect of the SARS outbreak or war in Iraq.
"One of the few sources of strength by industry in March was hospitality, which includes restaurants and hotels," Porter said. "Clearly that's an area that's at the biggest risk in the near term from SARS."
March's modest job gains brought Canada's job tally to 67,000 in the first three months, the weakest quarterly showing since the end of 2001.
While the pace of job growth has cooled, the employment rate remains at an all-time high of 62.5%. That means the Bank of Canada is likely to continue hiking interest rates later in the year, even if it holds the line in its next scheduled meeting April 15.
"I think it's not an argument any more over how strong the Canadian economy is," Porter said. "I think it's an argument about how high inflation is and whether it will come down or not." The fear of soaring crude oil prices has subsided as the war in Iraq progresses, but consumers are still coping with the fallout of high energy prices.
"There's a risk that consumer spending over the next year on the other goods will be severely pinched by sky-high heating bills a lot of people are going to face," Porter said. "Not only are people paying more for natural gas, they're being forced to run their furnaces into April."
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