March 19, 2010

Carrick: Construction jobs in Canada gradually catching up with manufacturing

The contruction sector lost 130,000 jobs between October 2008 and July 2009. Thanks to government infrastructure stimulus money and the revival in housing starts, the construction sector has recovered 45,000 of those jobs over the past eight months.

In February, construction employment did drop back again by a little (-11,000). But the upcoming government work (i.e., stimulus spending on infrastructure) that will be reaching the job-site stage will provide support for the sector throughout this year.

Something remarkable to take note of is the relative importance of construction jobs in Canada versus manufacturing jobs. A dramatic shift has been taking place over the last decade.

At the start of 2000, there were 2.2 million manufacturing jobs in Canada versus 815,000 direct construction jobs. The ratio was nearly three to one (2.79).

In the latest data set, there are 1.764 million manufacturing jobs in Canada versus 1.175 million construction jobs. The ratio has dropped by nearly half to only one-and-a-half to one. (1.50).

The two sectors combined continue to account for about 3.0 million jobs in total. Manufacturing jobs have simply fallen victim to automation, the rise in value of the Canadian dollar and low-cost labour in newly emerging nations.

-Alex Carrick, CanaData chief economist

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