Employment dipped 13,000 in May, the second consecutive monthly decline. A jump in the number of people entering the labour market in search of work pushed the unemployment rate up 0.3 percentage points to 7.8%.

So far in 2003, employment growth has been relatively weak compared to 2002. In the first five months of the year, employment has increased 35,000, or 0.2%, not enough to keep pace with population growth. By this point in 2002, employment had surged 249,000 (+1.6%).

The share of the population which was employed (employment rate) was 62.2%, down 0.3 percentage points from the record high set in February and March of this year. However, the employment rate in Canada has been higher than the rate in the United States since October 2002.

While full-time employment is up 76,000 (+0.6%) so far in 2003, it fell 20,000 in May. Youths accounted for most of the full-time decline in May.

Health care employment in Ontario recovered in May from the losses the month before while a gain in accommodation and food only partially offset the loss in April. The reference week of the Labour Force Survey (May 11th to 17th), occurred after the end of the first outbreak and before the second round of SARS hit Toronto.

Drop in employment for adult men

Employment among adult men fell 23,000 in May, with almost two-thirds of the decline in part-time. Losses for adult men were widespread in a number of industries with the largest decline in retail and wholesale trade. The unemployment rate for adult men increased 0.3 percentage points to 6.7%.

Part-time gains among youths offset full-time losses, leaving overall youth employment unchanged for the month. With more youths looking for work, their unemployment rate increased 0.4 percentage points to 13.8%.

Despite the lack of job growth in May for youths as a whole, the summer job market for students was better than it was a year earlier. The employment rate for 20 to 24 year old students (those who had been attending school full-time and who planned on returning in the fall) was 61.2%, up 1.6 percentage points from May 2002. However, all the increase in summer employment for students has come in the form of part-time work.

For adult women, employment was up slightly (+13,000), with all of the gain in full-time. The largest increase for adult women came in health care and social assistance. There was also a large increase in labour force participation among adult women, pushing their unemployment rate up 0.3 percentage points to 6.6%.

Compared to the start of the year, employment among adult women and youths is virtually unchanged, in sharp contrast to the strong upward trend in 2002. Despite this month’s decline, employment for adult men remains 30,000 higher than at the start of the year (+0.4%).

Manufacturing employment stalled

Manufacturing employment was unchanged in May. After rebounding in the first half of 2002, manufacturing employment has been on a downward trend since last August (-65,000 or -2.7%), driven mainly by declines in transportation equipment and computer and electronic product manufacturing. In May, transportation equipment manufacturing fell but this was offset by gains in food processing and other non-durable goods production.

In May, there were 278,000 people employed in food processing, the second largest component of the manufacturing sector in Canada (after transportation equipment). The case of mad cow in Alberta was reported on May 20th, just after the end of the Labour Force Survey reference week. As a result, any impact of mad cow on the labour market would not be reflected in the May estimates.

Employment fell in a number of service-producing industries in May. The largest drop was in finance, insurance, real estate and leasing which was down 19,000. However, this remains a growth industry, due to the booming real estate sector. In the last year, employment in finance, insurance, real estate and leasing is up 33,000 (+3.7%), with half of the increase coming from real estate. Construction employment was up slightly in May and is 44,000 (5.1%) higher than a year ago.

In May, retail and wholesale trade employment fell 14,000. After strong gains in the 1998 to 2001 period, trade employment growth slowed in 2002, and has been unchanged so far this year.

Transportation and warehousing employment fell 12,000 in May, driven by a decline of 21,000 in Ontario. Since peaking in September 2002, transportation and warehousing employment has fallen 38,000 (-4.8%), with all of the decline in Ontario.

After falling 18,000 in April, employment in accommodation and food fell another 11,000 in May. While April’s decline was concentrated in restaurants in Toronto, the decline in May occurred in restaurants in the province of Quebec. Toronto saw some recovery in accommodation and food employment in May.

Gains in information, culture and recreation

The largest gain in employment in May was in information, culture and recreation, where an additional 20,000 people were employed. Gains were made in publishing and gambling.

Following a decline of 17,000 the month before, health care and social assistance employment increased 18,000 in May, with 11,000 of the gains in Ontario. This puts health care and social assistance back on its strong upward trend. In the last year, employment in the industry has increased 88,000 (+5.5%).

Added employment in the building maintenance services industry in May pushed employment up 13,000 in the management, administrative and other business support services sector. In the last year, this sector has been adding workers at a rapid pace. Compared to May 2002, there are 36,000 (+6.0%) more people working in management, administrative and other support services.

Employment trend flattens in Ontario

After strong job gains in the second half of 2002 and into the early part of 2003, employment growth has stalled in Ontario in the last two months. A large drop in full-time was offset by part-time gains leaving employment in the province in May unchanged. The unemployment rate increased 0.3 percentage points to 7.1% due to a large number of people entering the labour force.

In Toronto, food and accommodation recovered about a third of the loss in April while gains in health care in May fully offset the losses the month earlier. However, there was a large drop in transportation and warehousing, dragging overall employment down 11,000 in the city. In both Ottawa and Oshawa there were continued job gains, helping offset the loss in Toronto.

With drops in accommodation and food and public administration, employment was down slightly in Quebec and the unemployment rate in the province rose 0.2 percentage points to 9.3% in May. So far in 2003, employment in Quebec has dropped 17,000 (-0.5%).

Although full-time employment in British Columbia increased 13,000, part-time declined 21,000, pushing the unemployment rate up half a percentage point to 8.6% in May.

Following a decline of 5,000 in April, employment fell by another 9,000 in May in New Brunswick. This caused the unemployment rate to leap 1.7 percentage points to 12.0%. Losses were widespread in a number of industries, but the largest decline was in food manufacturing. Almost all the decline was in full-time work.

The only province with a notable increase in employment in May was Alberta, where an additional 13,000 people were employed, due to gains in oil and gas, education and health care and social assistance. With more people also looking for work, the unemployment rate in Alberta increased slightly to 5.6% (+0.1 percentage points).

There were no significant changes in employment in any of the other provinces.