The signs of a slowing economy are already here with falling stock markets and real estate prices alongside rising inflation and interest rates.martin-dm/iStockPhoto / Getty Images
The Canadian job market is still hot but headlines warn that maybe the economy is not, with talk of a looming recession leaving some workers worried about their career paths.
Signs of a slowing economy are already here with falling stock markets and real estate prices alongside rising inflation and interest rates. The World Bank has lowered its global growth forecast and says a recession will be hard to avoid in some countries.
“Is the sky falling? No. But there are certainly winds of change ahead,” says Alan Kearns, founder and managing partner at CareerJoy, a national human resources services firm based in Toronto.
In times like these, he says it’s important for workers to think carefully about a job change. However, it doesn’t necessarily mean staying put. Some sectors will feel the impact of an economic slowdown, while others may grow.
“I think there’s always opportunity, and you shouldn’t manage your career by headlines,” Mr. Kearns says. “You just want to be a bit more careful… about the choices you’re making and the opportunities you’re exploring.”
Despite the economic unease, it remains a job seeker’s market. Canada’s unemployment rate fell to 5.1 per cent in May, the lowest since comparable data became available in 1976, according to Statistics Canada.
“The Canadian labour market seems in pretty solid shape,” says Brendon Bernard, a senior economist in Canada for the Indeed employment website.
There has been some wage growth even though the economic cycle is more uncertain than it has been at any point during the pandemic recovery so far, he says.
Employment fell in May in manufacturing, finance and real estate but saw solid gains in retail and wholesale trade, education, accommodations and food services. Jobs also continue to grow in professional and technical services, Mr. Bernard adds.
“It’s tough to really know you’re in a recession until you’re already in one,” he says. “People’s track records on predicting material downturns aren’t always so great.”
He says that a weak job market is one of the most reliable indicators of recession, but predicting that in advance is difficult. For the past few months, the layoff rate has been really low in Canada – another indicator of a strong job market.
“So if we’re looking for signs of weakness in our traditional job data, it’s not showing up yet,” Mr. Bernard says.
Indeed tracks Canadian job postings in real-time on its website and that, too, remains up 73 per cent from their pre-pandemic level in early May and up 70 per cent in early June.
“That’s building off of major progress that we’ve seen throughout 2021, where employer demand went through the roof,” Mr. Bernard says.
The surge could be cooling a bit in sectors more sensitive to the economic cycle, such as construction and manufacturing. Or it could be a normalizing following the hot labour market of 2021, he says.
“Right now, it still does seem like a job-seeker’s market,” he says.
ManPower Group’s latest employment outlook report says 43 per cent of Canadian companies surveyed intend to hire in the third quarter of this year and 77 per cent report difficulty in filling open positions.
There was a lack of job movement at the start of the pandemic, as people were reluctant to change positions during uncertain times, says Henry Goldbeck, founder and president of Vancouver-based Goldbeck Recruiting. He notes that led to a significant backlog that has played out over the past many months.
Talk of recession doesn’t seem to have curbed that pent-up demand, he adds.
“We haven’t had any active positions we’ve been working on cancelled because of fear of recession,” Mr. Goldbeck says. “What we’re hearing from our clients is still the same and the employee market is very, very tight.”
Industry sectors, including forestry, mining and oil and gas, are still strong, they have contracts to fulfill, and they’re hiring to fulfill them, he says.
The technology sector may be more likely to be affected by a downturn, and there are signs of that in the United States, he says. The Globe and Mail recently reported a potential wave of layoffs in Canada’s tech industry is also looming.
Employees shouldn’t change for change’s sake, just as they shouldn’t stay put for fear of an economic downturn is coming, Mr. Goldbeck says.
“From an individual point of view, I think what you want to do is focus on what’s important to you and your career,” he says.
Mr. Goldbeck also recommends that anyone looking for work do some due diligence, as they would in any economic climate. It’s important to research a potential new employer, its history, growth and staff turnover, and to ask yourself where you want to be in five or 10 years.
“All of those things you would want to ask anyway, regardless of the economic situation,” he says. “You need to think long-term and plan and make decisions accordingly for your career.”