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Canadian employers are looking to hire at a “brisk” pace in the first quarter of 2023, according to the latest ManpowerGroup Inc. survey, suggesting the labour market will remain tight despite worries about a recession.
The quarterly survey of more than 1,000 Canadian employers found that 46 per cent said they plan to hire in the first quarter, while 13 per cent expect to cut back their workforce and 38 per cent intend to keep staffing at current levels.
“Employers in all regions of the country and all industry sectors surveyed expect to add to payrolls next quarter,” ManpowerGroup said in a press release.
ManpowerGroup’s net employment outlook, a gauge of hiring intentions that subtracts the percentage of employers who plan to cut workers from those who plan to hire, registered positively across the board. Nationally, the outlook stands at 34 per cent, on an adjusted basis, up three percentage points from the previous quarter, but down by that amount from a year ago.
Positive hiring outlooks were posted across the country, though a slowing of hiring intentions was recorded in some regions: Western Canada was at 35 per cent, down seven percentage points from the fourth quarter of 2022; Quebec was at 34 per cent, up nine percentage points; Atlantic Canada and the Prairies were at 33 per cent, down three percentage points; and Ontario was at 32 per cent, unchanged from Q4.
By industry, finance and real estate, and industrials and materials recorded the strongest outlook at 44 per cent, up 14 percentage points and seven percentage points from the fourth quarter. Meanwhile, health care and life sciences recorded the weakest, though still positive outlook, at 25 per cent, unchanged from Q4 2022 but down 14 percentage points from the same time last year.
The drop in some outlooks could be reflective of a slowing employment market.
“There have been early signs of softening in the (jobs) outlook,” RBC Economics said in a note. RBC expects the economy to add a “soft” 5,000 jobs in December, pushing the unemployment rate to 5.2 per cent from 5.1 per cent. Still, RBC said the shortage of workers will continue to dominate the employment narrative, a sentiment echoed by ManpowerGroup.
“Employers across Canada will continue to search for skilled workers in the first quarter of 2023,” Darlene Minatel, country manager of ManpowerGroup Canada, said in the release. “A tight labour market is to be expected during times of high inflation, as companies try to meet demand.”
Statistics Canada reported there were 991,680 vacant positions in the third quarter of 2022, its most recent data, just off a record high of 1,031,955 unfilled jobs in the second quarter. Vacancies jumped in the second quarter of 2021, after trending around the half-million mark prior to the pandemic.
Bank of Canada governor Tiff Macklem has said he hopes the elevated number of job openings in the Canadian economy will help take the sting out of a widely expected economic downturn this year.
“Because the labour market is so hot and we have an exceptionally high number of vacant jobs, there is scope to cool the labour market without causing the kind of large surge in unemployment that we have typically experienced in recessions,” Macklem said during a speech in Toronto in November.
In 2022, the Bank of Canada hiked rates seven times over the course of the year, lifting the benchmark interest rate to 4.25 per cent from 0.25 per cent in March. The central bank next meets on Jan. 25.
The stated goal of the rate increases was to reel in inflation, currently at 6.8 per cent, by dampening demand and, in turn, cooling off the economy. Inflation is still well above the Bank of Canada’s target rate of two per cent.
Canadians will get a sense of how the labour market is faring under Macklem’s string of rate hikes when Statistics Canada reports jobs numbers for December on Friday.
