Canada is reporting its highest quarterly job vacancies on record, with 957,500 open positions in the first quarter of 2022 – up 2.7 per cent from the previous peak last quarter.
The latest numbers, released by Statistics Canada on Tuesday, showed a job vacancy rate of 5.6 per cent, continuing an upward trend since the first quarter of 2016.
The agency said that while the job vacancy rate did continue to increase, the pace has slowed as payroll employment recovered in the fourth quarter of 2021.
CIBC deputy chief economist Benjamin Tal said he does not see Canada’s labor shortage improving notably any time soon.
“We have a structural shortage of those positions and the market will have to react to it through the wage mechanism,” said Tal, noting that wages will have to rise and working conditions will have to improve in order to attract people back into these jobs. .
Meanwhile, unemployment is shrinking. Statistics Canada reported the unemployment-to-job-vacancy ratio was 1.3 in the first quarter, down from 2.2 in the same quarter of 2020.
Historically, we never see a relationship like that
“That just speaks to how strong the labor market is and how tight conditions are,” said Robert Kavcic, senior economist at the Bank of Montreal (BMO).
Kavcic said the fact that vacancies and unemployment are coming close to each other shows Canada is almost at a point where there’s one open position for every unemployed person. “Historically, we never saw a relationship like that,” he said.
According to Statistics Canada, the ratio had already dropped from a high of 3.9 in the first quarter of 2016 to a low of 2.2 in the first quarter of 2020, prior to the pandemic.
The agency said that as employers faced mounting job vacancies, the pool of unemployed workers who could have filled vacant positions continued to dwindle, with further decreases in unemployment from October 2021 to March 2022.
The unemployment rate dropped to a record low of 5.1 per cent in May. As a result, the unemployment to job vacancies ratio fell to 1.3 in the first quarter of 2022, it said.
There’s just a lot of demand for labor and not enough people to fill jobs right now, at least not where they’re needed
“There’s just a lot of demand for labor and not enough people to fill jobs right now, at least not where they’re needed,” Kavcic said.
Statistics Canada said employers faced significant hiring challenges during the first quarter, due in part to a shrinking pool of unemployed workers. In that period, there were 33.6 newly hired employees for every 100 vacancies.
In comparison, the ratio of new hires to vacancies was 47.8 in the first quarter of 2021 and 81.1 in the first quarter of 2016, when comparable data first became available.
Vacancies reached all-time highs in some sectors, including in the health care and social assistance sector, which has been hit hard by the pandemic.
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That sector posted a record of 136,800 job vacancies in the first quarter, up five per cent or 6,600 openings from the previous quarter.
Among health occupations, the increases in vacant positions in nurse aides, orderlies and patient service associates, registered nurses and registered psychiatric nurses, and licensed practical nurses accounted for 67.7 per cent of the overall vacancies.
Other sectors such as construction and manufacturing and retail trade also reached new highs.
It’s everywhere across the economy
The construction sector saw a 7.1 per cent jump from the fourth quarter of 2021, with employers actively seeking to fill 81,500 vacant positions in the first quarter, while the manufacturing and retail trade sectors peaked at 87,400 vacancies, up 5.3 per cent from the previous quarter .
“(Job vacancies) are not just in pandemic-related industries, like health care or accommodation and tourism. It’s everywhere across the economy, ”said Kavcic.
He added that vacancies are especially acute in the construction industry right now, with more than double the number of vacant positions from pre-pandemic levels, as the country sees tremendous demand for housing and record-high construction activity.
Kavcic said this speaks to how broad the strength in the labor market currently is. “It’s not like some periods in history where you’d have one particular industry that was extremely strong and driving employment trends and short on labor,” he said. “It’s pretty much like point to point across the entire economy right now.”
He said he predicts that as the economy slows down considerably in the second half of the year and into 2023 due to interest rate hikes, this will probably dampen the demand for labor, and slow activity in a number of industries, including real estate.
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