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Canada. Non-farm payroll employment up

Non-farm payroll employment increased by a moderate 34,500 in October. Since June, the trend in non-farm payroll employment has been flat, as a number of industries have shown a marked shift away from the large cuts that occurred during the first eight months in the economic downturn.

In October, less than half (44.3%) of all industries added to their payrolls. However, gains in education, health care and social assistance, as well as construction, were sufficiently large to offset declines elsewhere.

October's increase was mainly the result of an additional 20,000 jobs in educational services and 14,600 in health care and social assistance, as well as smaller gains in the construction sector and the banking industry.

The increases in education and health care and social assistance employment are part of a longer trend. Both sectors have recorded payroll employment gains throughout the economic downturn. Construction-related payroll jobs have been trending up since June.

Stabilization of labour market coming from a number of industries

Since June, when most Canadian industries began shifting away from heavy declines, non-farm payroll employment has edged up by 16,900. This amounts to an average increase of about 4,200 jobs per month nationally. This is not large, but is a notable change from the average monthly loss of 51,200 jobs in the eight months that followed October 2008.

The shift in trends since June has come from a number of industries, with the largest change coming from manufacturing. From October 2008 to June 2009, manufacturing shed over 21,600 jobs a month on average. Since June, the pace of job losses has slowed considerably to about 6,000 a month.

Virtually all parts of manufacturing have moved from large declines to more moderate reductions in payroll counts. Motor vehicle parts manufacturing, where job losses were particularly steep between October 2008 and June 2009, has shown a slight increase since June.

The situation was similar in wood product manufacturing, another major contributor to the shift in the employment trend within manufacturing. With a small increase in payroll jobs in October, employment in this industry was up from where it was four months earlier. Wood manufacturers make lumber, plywood and other related products.

Solid recovery in construction

The improvement of the situation in wood product manufacturing is likely related to a recovery in construction, where payroll employment rose by 3,000 in October, the third consecutive monthly increase.

Compared with June, almost all industries in the construction sector have added jobs. The largest gains have been in heavy and civil construction jobs, the building of highway, streets, bridges and utilities systems. In that part of construction, payroll employment has increased by 7,500 since June, accounting for half of the overall gain in construction during this four-month period.

Job levels in some wholesale and retail trade industries with ties to construction have also stabilized or risen in recent months. This part of retail and wholesale trade appears to be recovering better than many other parts of the sector, which continued to see an overall decline in employment.

In October, 4,400 payroll jobs were added in depository credit intermediation, which includes banks and credit unions. This increase brought the number of employees working in this industry back to the record-high of January 2009.

Employment services (the group which includes temporary help agencies and job placement services) also saw an increase in October (+2,100). Employment services had seen a particularly large drop in payroll jobs in the early months of the downturn. It was another industry where the job situation showed more recent stability.

Although unchanged in October, the traveller accommodation industry has recovered almost all the job losses experienced earlier in the year. However, payroll employment in food service and drinking places fell by 3,200 in October, continuing its downward trend.

Payroll employment in public administration fell by 2,700 in October. Despite this drop, the level in public administration remains 20,500 higher than it was in June.

Slower growth in average weekly earnings in October than at start of downturn

Average weekly earnings, including overtime, of payroll employees was $831.17 in October, up 1.6% from October 2008. Year-over-year growth has been hovering around this level since June. In the months before the labour market contraction began, the year-over-year increase in average weekly earnings was in the 3% range.

Among Canada's largest industrial sectors, average weekly earnings increased between October 2008 and October 2009 in public administration (+4.2%), retail trade (+4.1%), educational services (+3.0%), accommodation and food services (+1.9%), and health care and social assistance (+1.1%). Average weekly earnings in construction were down 0.3% from October 2008.

Over the same period, average weekly earnings also fell in manufacturing (-1.9%). Earnings fell 6.3% from $1,011.79 to $947.65 in motor vehicle parts manufacturing, the manufacturing industry with the largest year-over-year drop in payroll jobs.

Other manufacturing industries experienced sharper drops in average weekly earnings than motor vehicle parts over this span. These include steel product manufacturing from purchased steel (-17.6%), iron and steel mills and ferro-alloy (-15.7%), non-ferrous metal (except aluminum) production and processing (-12.7%), and printing and related support activities (-12.6%).

Average weekly earnings rose in all provinces between October 2008 and October 2009. The fastest increase occurred in Prince Edward Island (+5.2%), followed by Manitoba (+4.7%) and Newfoundland and Labrador (+4.6%). Quebec experienced the smallest year-over-year increase (+0.7%).

© Statistics Canada -

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