Economic and Social Reports
Labour market imbalances: Evidence from the Canadian Economic Tracker

Every month, Statistics Canada publishes dozens of statistical data releases and analytical insights as part of its mission to help Canadians better understand their country. These statistics illuminate the trends affecting those living in Canada, and the interrelated dynamics of the Canadian economy. Trends or shocks in any economic sector reverberate to other sectors: between spending and production, between jobs and prices, across industries and geographies. These dynamics have been especially strong during the period of economic turbulence triggered by the COVID-19 pandemic, which has highlighted the value of timely, granular statistics for understanding Canadian society.

The Canadian Economic Tracker, released on May 16, 2023, is a new data visualization tool combining selected monthly indicators of economic activity from Statistics Canada’s Common Output Data Repository into a unified, customizable interface. The tracker currently includes six indicators: business openings and closures, employment and weekly earnings, job vacancies and vacancy rates, gross domestic product, the Consumer Price Index, and the Industrial Product Price Index. Each new data release for these series is automatically incorporated into the Canadian Economic Tracker, ensuring that the statistics remain timely and up to date.

The Canadian Economic Tracker brings together the work of numerous program areas within Statistics Canada, in terms of both the underlying data being displayed and the collaboration that led to its creation and design. The visualization interface facilitates comparisons across economic indicators and disaggregation by industry, product category and geographic area. This project reflects the principle that integrating information across fields of economic activity strengthens one’s ability to understand the Canadian economy and its evolving dynamics.

This article is the first in a series that will uncover insights from the Canadian Economic Tracker. These articles will explore and interpret the trends affecting Canadians as economic activity continues to rebound from the pandemic.

Labour market imbalances persist, but vary across industries

Sizable imbalances between labour demand and supply have been a persistent feature of the recovery from the pandemic since economic activity began ramping up steadily in the second half of 2021. Despite the addition of 1.4 million payroll jobs from mid-2021 to the spring of 2022, job vacancies—before adjusting for seasonality—rose above the one-million mark from April to June 2022, as challenges around worker recruitment and retention remained widespread. While robust job gains in more recent months have been accompanied by a gradual easing in the number of unfilled positions, total vacancies remain well above pre-pandemic levels, as the ratio of unemployed workers to total vacancies—a key indicator of labour market tightness—remains near historic lows.^Note

Unmet labour demand eases in accommodation and food services and in manufacturing

Changes in total vacancies over the past year can obscure important differences at the industry level, where employers and workers continue to adjust to specific pressures. Easing vacancies in client-facing sectors, such as accommodation and food services, and in trade-intensive sectors, like manufacturing, contrast with the continued buildup of labour demand in public sector services, notably health care and social assistance. What follows is a brief overview of recent employment and output trends in these sectors.

Over the past year, fewer businesses in accommodation and food services and in manufacturing have reported challenges related to recruitment and retention, and hiring intentions in both sectors have begun to scale back (Chart 1).^Note After remaining in or near double digits for five consecutive quarters, the job vacancy rate in accommodation and food services fell to 7.8% in late 2022, still over three percentage points above its pre-pandemic level.^Note Increases in offered wages from late 2021 to late 2022 in this sector (+5.4%) have lagged behind the economy-wide average (+8.5%). The total number of vacancies in accommodation and food services has declined sharply since mid-2022, falling to 90,000 by year end, and has remained near that mark in early 2023.^Note

Data table for Chart 1



Data table for Chart 1
Table summary
This table displays the results of Data table for Chart 1. The information is grouped by Months and years (appearing as row headers), Accommodation and food services, Manufacturing and Health care and social assistance, calculated using number of vacancies units of measure (appearing as column headers).

Months and years	Accommodation and food services	Manufacturing	Health care and social assistance
	number of vacancies
2019
January	56,540	44,505	57,450
February	54,095	46,520	60,400
March	59,675	50,900	68,380
April	74,170	55,800	65,970
May	82,280	47,315	74,950
June	75,835	49,355	66,250
July	74,280	47,610	63,565
August	78,415	47,350	65,670
September	77,600	53,730	70,830
October	67,265	48,895	61,460
November	64,095	39,805	69,425
December	52,965	37,980	61,010
2020
January	57,300	42,330	70,185
February	60,565	42,380	73,580
March	66,815	40,175	71,400
April	Note ..: not available for a specific reference period	Note ..: not available for a specific reference period	Note ..: not available for a specific reference period
May	Note ..: not available for a specific reference period	Note ..: not available for a specific reference period	Note ..: not available for a specific reference period
June	Note ..: not available for a specific reference period	Note ..: not available for a specific reference period	Note ..: not available for a specific reference period
July	Note ..: not available for a specific reference period	Note ..: not available for a specific reference period	Note ..: not available for a specific reference period
August	Note ..: not available for a specific reference period	Note ..: not available for a specific reference period	Note ..: not available for a specific reference period
September	Note ..: not available for a specific reference period	Note ..: not available for a specific reference period	Note ..: not available for a specific reference period
October	52,275	51,505	94,330
November	43,370	46,960	109,790
December	43,495	41,125	99,085
2021
January	33,015	52,800	87,535
February	40,275	49,465	116,170
March	71,570	54,980	96,740
April	64,510	69,180	103,200
May	78,365	62,390	119,565
June	123,700	66,025	106,285
July	137,910	80,005	101,115
August	166,005	81,925	127,295
September	189,485	81,755	126,765
October	155,415	91,975	120,320
November	133,605	81,575	121,270
December	140,225	72,500	134,030
2022
January	96,125	84,720	133,885
February	116,595	80,030	121,335
March	151,555	84,250	147,535
April	152,045	92,125	126,970
May	166,215	86,720	140,975
June	169,770	82,645	147,285
July	149,250	83,380	150,150
August	140,995	87,090	142,480
September	151,850	75,860	157,905
October	127,105	79,950	150,145
November	111,680	69,745	133,335
December	90,035	60,500	147,410
2023
January	86,075	64,065	160,365
February	91,260	57,115	135,370
March	105,255	60,240	144,430
.. not available for a specific reference period Note: Data on job vacancies are not available from April 2020 to September 2020. Data are unadjusted for seasonality. Source: Statistics Canada, Canadian Economic Tracker.

Changes in employment and output in accommodation and food services have diverged in recent months. Payrolls have continued to trend higher, albeit at a more moderate pace, while output slowed during the second half of 2022, as higher prices weighed on discretionary spending (Chart 2).^Note Business openings have held steady as borrowing and debt-servicing costs have risen.

Data table for Chart 2



Data table for Chart 2
Table summary
This table displays the results of Data table for Chart 2. The information is grouped by Months and years (appearing as row headers), Accommodation and food services, Manufacturing and Health care and social assistance, calculated using index (January 2021=100) units of measure (appearing as column headers).

Months and years	Accommodation and food services	Manufacturing	Health care and social assistance
	index (January 2021=100)
2021
January	100.0	100.0	100.0
February	105.9	98.3	100.7
March	119.4	99.4	101.2
April	107.0	97.4	101.9
May	102.1	97.0	102.4
June	120.6	98.6	102.7
July	137.2	97.8	103.0
August	146.5	98.1	103.1
September	145.9	96.7	103.2
October	144.3	99.1	103.2
November	147.3	100.2	103.2
December	145.3	100.8	103.4
2022
January	125.1	101.4	103.3
February	142.7	102.0	103.9
March	153.7	103.8	104.1
April	155.6	103.6	104.2
May	158.1	103.0	104.5
June	160.4	103.5	104.8
July	160.2	102.9	105.2
August	161.6	102.4	105.5
September	161.5	102.5	105.9
October	162.0	101.6	106.4
November	160.5	101.9	106.7
December	161.2	101.7	107.0
2023
January	168.0	102.9	107.3
February	168.0	103.3	107.5
March	164.3	102.6	107.7
Source: Statistics Canada, Canadian Economic Tracker.

While labour-related challenges in manufacturing have also eased, elevated input and transportation costs remain key obstacles as supply chain disruptions continue to unwind.^Note The job vacancy rate in manufacturing declined to 4.3% in late 2022, down about one percentage point from peak levels earlier in the year, but 1.7 percentage points above its pre-COVID-19 benchmark. After trending lower during the second half of 2022, vacancies in manufacturing totalled about 60,000 by year end and remained near that level in early 2023.

As with accommodation and food services, output has moderated as labour market conditions have improved. Manufacturing payrolls edged higher in late 2022 as hiring intentions scaled back, with moderate job gains offsetting weaker hiring during the summer months. At the same time, factory output has slowed, with real volumes decreasing in four of the last six months of 2022, as business openings moderated.  

Little sign of vacancies easing in health care and social assistance

During the past year, there has been little change in the number of health care and social assistance organizations reporting labour-related obstacles. Over 4 in 10 organizations in health care and social assistance anticipate near-term challenges recruiting skilled workers, while one-third expect difficulties retaining their employees.^Note Unlike in other sectors, vacancies in health care and social assistance have held steady at elevated levels as payrolls have risen.

Payrolls in health care and social assistance rose steadily during the last four months of 2022 and were 134,000 above their pre-COVID-19 benchmark (a net gain second only in magnitude to professional, scientific and technical services). The job vacancy rate in health care and social assistance, at 6%, remains twice its pre-pandemic level. The number of unfilled health care positions (+96,200) has continued to edge higher, led by increased demand for registered nurses and registered psychiatric nurses; licensed practical nurses; and nurse aides, orderlies and patient service associates. Since late 2021, increases in offered wages in health care and social assistance (+8.2%) have been in line with the economy-wide average. Total vacancies in health care and social assistance, before adjusting for seasonality, reached 160,000 in January 2023, before edging lower in February and March.

Vacancies and educational requirements

The tabulations above illustrate how the Canadian Economic Tracker can be used in combination with other data sources to develop sector-specific profiles. A concurrent analysis by Morissette (2023) yields new insights into current labour market imbalances by examining the extent to which the number of unfilled positions requiring a given education level compares with the number of unemployed individuals with such education. The author finds no evidence that unfilled positions requiring higher levels of education reflect a lack of highly educated job searchers. On the contrary, the number of highly educated unemployed individuals exceeds the number of these positions in nearly all economic regions. This finding suggests that a lack of concordance between the skills required in these positions and the skills possessed by job searchers plays an important role. The inverse is true for vacancies with low educational requirements, with unmet demand exceeding labour supply in most parts of the country.

Authors

Guy Gellatly is with the Strategic Analysis, Publication and Training Division, Statistics Canada. Michael Stepner is with the Social Analysis and Modelling Division, Statistics Canada.

References

Morissette, R. 2023. Unemployment and job vacancies by education, 2016 to 2022 (statcan.gc.ca). Economic and Social Reports. Catalogue no. 36-28-0001,Volume 3, Issue 5. Ottawa: Statistics Canada.