The AEC Lens
Alex Carrick, Chief Economist at ConstructConnect
Alex Carrick is Chief Economist for ConstructConnect. He is a frequent contributor to the Daily Commercial News and the Journal of Commerce. He has delivered presentations throughout North America on the Canadian, United States and world construction outlooks. A trusted and often-quoted source for … More »
15 Eye-Catching Charts that Highlight Trends in Canada and U.S. Jobs (Part 3)
May 13th, 2016 by Alex Carrick, Chief Economist at ConstructConnect
Article source: ConstructConnect
In Part 3 of this Economy at a Glance, we’ll conclude our examination of how certain key sectors of the Canadian and U.S. economies are performing, as captured by the slopes of their jobs graphs.
As stated 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 is that the U.S. numbers are seasonally adjusted, while for Canada, they are moving 12-month averages of not seasonally adjusted (NSA) figures, placed in the latest month.
Some of the charts in Parts 1 and 2 grabbed one by the neck-tie and demanded that attention be paid. In Part 3, while subdued by comparison, they still offer much that is informative.
Canada Elementary and Secondary Schools (Graph 11): Demographics as a driver of elementary and secondary school attendance, and by extension new construction, is currently quite positive. The number of children in the relevant age cohort from 4 to 17, after declining from 2000 to the present, is now set to begin increasing again in fairly dramatic fashion, out to at least the mid-2030s.
Canada Community Colleges (Graph 12): The ‘community college’ category includes Quebec’s C.E.G.E.P.s (Collèges d’enseignement general et professionnel). Employment in colleges in Canada has flattened since the mid-point of 2010. Due to the fact the age-specific demographic drivers for colleges are mostly the same as for universities, both will be covered in the next section.
Canada Universities (Graph 13): Take what was said for elementary and secondary schools and turn it upside down. The primary age-relevant cohort for college and university enrolments is 18 to 26. While the population count for that faction in society has risen steadily during the 16 years since the start of the new millennium to the present, a tumble will be occurring from this point in time moving forward until about the middle of the 2020s.
Employment in universities has been exhibiting a gentler upward slope in the latest two-and-a-half years. The best hope for this branch of academia may reside in older adults and retired seniors returning to classrooms for re-training, skills upgrades and the general thrill of the learning experience. The latter may lead to a second degree in a beloved subject that was put on the back burner during the raise-a-family and bring-home-the-bacon years.
Canada Hospitals (Graph 14): In the U.S., employment in hospitals has followed a bumpy pathway since the introduction of the Patient Protection and Affordable Care Act in 2010. Not so in Canada, which has a long history of universal health care.
As Graph 14 so ably illustrates, there’s been nary a setback in the upward progression of the jobs level at Canada’s hospitals over the past dozen or so years. Not even during the Great Recession.
And now the federal government is planning a big boost to spending on socially- and ecologically-conscious infrastructure projects over the next 10 years. Hospital boards will be rejoicing and hospital workers will see their ranks swell.
U.S. Temporary Help Services (Graph 15): For three to four years following the 2008-2009 ‘Big Dip’ in the U.S. economy, the stirrings of employment re-birth were most apparent in the ‘temporary help services’ sub-sector jobs category. Graph 15 highlights how steeply inclined the curve was in 2010 through 2012.
The logic flows easily. Employers, shaken by the severity of the preceding precipitous plunge and worried that the recovery might not last, were quick to hire part-time workers to satisfy any increases in orders for goods or services that might come their way.
As the improving business conditions became more prolonged, this stop-gap measure ran its course and was replaced with hiring policies more favorable towards full-time positions.
Now, with the unemployment rate at only 5.0%, the need to make job offerings attractive (i.e., through benefits, pensions, etc.) has become essential.
Still, there are analysts who point to the apparent flattening, of late, in the ‘temporary help services’ curve as conveying a forewarning of harsher times pending, perhaps leading to the onset of a new recession.
The argument is as follows. Some employers are beginning to experience more challenging business conditions once again and their response has been to dismiss part-time staff. From an administrative standpoint, and perhaps even an emotional one, such a course of action is a lot easier than downsizing supposedly permanent workers.
The foregoing seems to be a lot of weight to attach to a relatively small correction in the graph.
But if one believes in being ever-vigilant, then it’s a theory worth tagging and remembering.
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