3 Employment and wage growth aides transition

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The changes underway in Ontario and Quebec extend beyond manufacturing. The commodity boom affected most areas of their economies, as industries adjusted to take advantage of higher commodity demand and a rising exchange rate. With resource prices climbing, commodity producers made more profit and moved to expand production. Wages rose and employment shifted away from manufacturing toward mining (Figure 2 and 3). Increased income in resources, and demand for services such as financing for mining development, also lifted demand for services. As a result, wages and employment in services rose.

Ontario's economy remained buoyant, adding a total of 453,000 jobs from January 2003 to December 2007, despite the losses in manufacturing. A similar change occurred in Quebec, as the economy added 263,000 jobs despite cuts in agriculture, forestry and manufacturing. In both provinces, growth came from increases in services and construction. Overall, the unemployment rate declined from 6.9% to 6.5% in Ontario and from 8.4% to 7.0% in Quebec.

The pattern of wages and salary increases across industries are remarkably similar to the changes in employment. Gains have tended to be largest in mining and lowest in manufacturing. Growth across service industries was fairly uniform.

Figure 2
Average annual employment change by industry, 2002 to 2007

Figure 3
Average annual wage and salary growth, 2002 to 2007