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Slow economic growth spurs hiring soft patch

Statistics Canada will release its labour force survey on Friday. Economists are expecting only 7,500 new jobs and the unemployment rate to ease a notch to 7.3 per cent.

Kevin Van Paassen/The Globe and Mail

You know there's a lull in the jobs market when even Calgary recruiters are noticing.

Placing a skilled worker in a new job would typically take Jeff Aplin eight-to-10 weeks. These days, it's more like 16-to-20 weeks, he said.

"It's been really slow," said the president of David Aplin Group. "We've seen some hiring freezes here or there, some layoffs … and it's taking a long time for employers to make a decision."

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Most economists say the overall labour market has hit a hiring soft patch as global uncertainty, squeezed margins and uneven demand make employers more cautious. Surveys back that up: The outlook for hiring in the fourth quarter weakened from the previous quarter, Manpower's latest survey shows, while the Bank of Canada's most recent business outlook survey showed hiring plans softened in all regions.

After employment growth in August and September, "we look for the labour force survey to report only modest job growth" in October, "a more accurate portrayal of the underlying economy," Douglas Porter, deputy chief economist at BMO Nesbitt Burns Inc., said in a note.

Statistics Canada will release its labour force survey on Friday, with economists expecting only 7,500 new jobs and the unemployment rate easing a notch to 7.3 per cent. They will be published two days after a report on Canada's gross domestic product for August.

"We expect the [jobs numbers] will show a labour market that has run out of steam," said IHS Global Insight Canadian economists Arlene Kish and Jillian Kohut. "Overall, [this] week's data will simply point to an economy that's slowly but surely chugging along."

Several global companies, such as E.I. du Pont de Nemours & Co. and Advanced Micro Devices Inc., have shifted into layoff mode, reflecting headwinds they are facing. North American companies including Ford Motor Co. and Colgate-Palmolive Co. have announced plans to cut more than 62,000 positions since Sept. 1, according to a Bloomberg tally. That amounts to the biggest two-month drop since the beginning of 2010.

Slow economic growth, at just 1.8 per cent over 2012, will keep the unemployment rate at its current level this year, Moody's said in a note on Friday.

Still, the picture should be brighter this time next year, it added. "An accelerating global recovery by the end of next year will reinvigorate Canada's jobs engine, removing remaining labour market slack by early 2014."

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Any aggregate look at Canada's labour market masks considerable variation by region and industry. The mining, quarrying and oil and gas sector has seen the biggest percentage gain in employees in the past year, according to payrolls data out last week. Forestry is down the most.

By province, Alberta leads while New Brunswick and Nova Scotia have seen employee numbers contract compared with last year.

As for Mr. Aplin, in Calgary, other than still-strong demand for engineers, he describes hiring this year as "pretty tepid."

"Employers have kind of taken their foot off the pedal. They've been a little nervous."

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About the Author

Tavia Grant has worked at The Globe and Mail since early 2005, covering topics from employment and currency markets to trade, microfinance and Latin American economies. She previously worked for Bloomberg News in Toronto and Zurich, writing on mining, stocks, currencies and secret Swiss bank accounts. More

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