Part 2 of this Economy at a Glance continues the discussion concerning the health of certain key sectors of the Canadian and U.S. economies, as demonstrated in charts that record corresponding jobs levels.
(Continued from “15 Eye-Catching Charts that Highlight Trends in Canada and U.S. Jobs (Part 1).”)
As stated before, in Part 1, whether or not employment is on the upswing can give a pretty good indication of which way firms in a particular sector are leaning in terms of investment spending (which may be limited to machinery and equipment) or construction projects.
The underlying data for the U.S. and Canada comes from surveys of employers. A significant point of difference, however, is that the U.S. numbers are seasonally adjusted. For Canada, they are moving 12-month averages of not seasonally adjusted (NSA) figures, placed in the latest month. Also note that Canada’s charts begin in 2002, two year later than for the U.S. graphs.
Canada Motor Vehicle Parts Manufacturing (Graph 6): U.S. motor vehicle sales are currently about on a par with the highest level they have ever been. Canadian motor vehicle sales have gone well beyond that benchmark and are setting new all-time records.
Unfortunately, this isn’t necessarily translating into much improved employment levels among assemblers and parts manufacturers. Some of the reason is that in both countries, imports are satisfying significant portions of grand total demand. Furthermore, Canada’s place as principal foreign supplier to the U.S. has been supplanted, emphatically, by Mexico.
Automation and robotics, stepping forward hand-in-hand with other major changes sweeping through the economy in its entirety, have also been instrumental in suppressing additional manpower requirements.
For Graph 6, the number of jobs at parts makers rather than among assemblers has been chosen. The shapes of the slopes appear much the same for both segments of the combined auto sector. But it’s interesting to note that there are about twice the number of individuals engaged in making parts than in putting cars together.
Also, a strong presence of firms engaged in parts manufacturing helps explain why some smaller urban centers (e.g., Guelph) are at or near the top in current rankings of Canadian city labour markets, based on a low jobless rate and fast year-over-year employment growth.
Canada Ship and Boat Building (Graph 7): Employment in Canada’s shipbuilding industry was on a fist-clenching descent until the former Conservative federal government announced a $30-to-$40 billion spending program for new combat vessels and additions to the coastal and Arctic patrol fleets.
The two largest contracts were awarded to dockyards in Halifax (Irving) and Vancouver (Seaspan). Concerns about escalating costs for some of the work are causing Ottawa’s present Liberal regime to re-evaluate terms and perhaps try to include fuller participation by the Davie Yards in Levis, Quebec.
Canada Aerospace Product Manufacturing (Graph 8): In a stab at unintended irony, major airlines around the world have been placing large orders for quieter and more fuel-efficient planes based in large measure on the savings they have been realizing from the significant drop in the cost of jet fuel.
In an outstanding news story for Canada’s aviation industry, Montreal-based Bombardier – which has faced every kind of crosswind in attempting to launch its CSeries jet – has found a committed big-player customer in Delta Airlines, headquartered in Atlanta. The contract specifies firm delivery of 75 CS 100 aircraft, with another 50 on option, beginning in the spring of 2018. (Air Canada earlier signed a ‘letter of intent’ to purchase, but that’s like going to a prom with a cousin.)
Canada Oil and Gas Extraction (Graph 9): Graph 9 provides a good example of how the 12-month moving average is slow to capture the most recent trend. A look at the chart suggests the jobs decline in this sector is still not as great as occurred in 2009-2010, all anecdotal evidence to the contrary.
Nor is that the impression one would obtain from the Alberta government, which has moved into crisis mode, on account of crude’s global price descent. Such a stance is readily understandable, given that CAPEX (capital expenditures) on mega energy projects in the province fell by one-quarter last year, with a further double-digit percentage-decline expected this year.
To add to the nightmare, production from Oil Sands properties north of wildfire-ravaged Fort McMurray has been reduced by about 40%, or 1.0 million barrels per day. Normal output is 2.5 million bpd. There’s almost always a flip side, though. Think of all the jobs that will be opening up to rebuild the 15% of Fort McMurray that was destroyed by flames.
U.S. Truck Transportation (Graph 10): As is the case in Canada, employment in the trucking industry in the U.S. appears to coincide with the general pattern of activity throughout the economy. Close to two-thirds of domestic freight is hauled by truckers.
On that basis, therefore, is there reason to be concerned that the slope in Graph 10 has been plateauing for about six months lately? There will be more to say on this subject when Graph 15 is introduced in upcoming Part 3 of this Economy at a Glance.
(Continued in “15 Eye-Catching Charts that Highlight Trends in Canada and U.S. Jobs (Part 3).”)