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Friday, January 27, 2006

Study: Labour market shifts in manufacturing, construction and natural resources

2002 to 2005

Canada's hard-hit manufacturing sector, challenged by the rising Canadian dollar, shed jobs for the third year in a row in 2005.

However, while manufacturing has been declining, a number of other industries have seen employment gains. The fastest growing industries have been construction and natural resources, which have more than made up for the losses in manufacturing during the past three years, according to a new analysis of Canada's labour market.

The study, published today in the online version of Perspectives on Labour and Income, examines the performance of the three sectors between 2002 and 2005, focusing on resource-rich Western Canada and Central Canada's large manufacturing base.

During this period, employment in the manufacturing industry fell by nearly 149,000, or 6.4%, to about 2,173,000. Two-thirds of this decline occurred in 2005 alone.

The three-year decline in manufacturing jobs was the most significant period of contraction in the industry since the recession of the early 1990s. Still, the current weakness in manufacturing pales in comparison. In the early 1990s, factory jobs were disappearing at twice the rate they are now.

On the other hand, the construction and natural resources sectors, particularly Canada's oil and natural gas industry, are both booming.

Since the end of 2002, construction employment has risen by about 167,000, a 19% increase. Job gains in construction have been particularly strong in British Columbia, Quebec, Ontario and Alberta, as a result of soaring investment in non-residential construction.

At the same time, employment in natural resources has risen by just under 40,000, a gain of about 15%. The growth has been led by Alberta's oil and gas industry.

Overall, at the end of 2005, manufacturing accounted for 14% of total employment and construction, 6%. Natural resources represented only 2%. However, in Alberta, the 127,000 jobs in natural resources accounted for 7% of the province's overall employment.

Crude oil prices have skyrocketed in recent years, setting new highs throughout 2005. As a result, employment in the Alberta oil patch has jumped by about 30% since 2002. By the end of 2005, the region of Athabasca, Grande Prairie and Peace River had the hottest labour market in the country, with an unemployment rate of only 2.2%.

During the mid-to-late 1990s, manufacturing was a major source of new jobs. This ended in 2001, when the high-tech meltdown spurred many layoffs in the sector. More recently, manufacturing has been challenged by the value of the loonie which hit a 14-year high in the last quarter of 2005.

Manufacturing losses have been widespread, but some sectors have suffered more than others. Losses were pronounced in clothing and textiles, for example. Employment in the manufacturing of computer and electronic products was also down, having yet to recover fully from the high-tech meltdown.

Central Canada has been especially hard hit, with Quebec losing 68,000 factory jobs and Ontario 61,000 during the past three years. These losses account for just under 90% of the nationwide net loss in manufacturing during that period.

Definitions, data sources and methods: survey number 3701.

The article "Recent changes in employment by industry" is now available in the January 2006 online edition of Perspectives on Labour and Income, Vol. 7, no. 1 (75-001-XIE, $6/$52).

For more information, or to enquire about the concepts, methods or data quality of this release, contact Vincent Ferrao (613-951-4750;, Labour Statistics Division.

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Date Modified: 2006-01-27 Important Notices