Nearly half of the jobs created in Canada since the Great Recession were in just two sectors of the economy, a fact that highlights some economists’ fears Canada’s economy is becoming “unbalanced.”
According to a new report from the Conference Board of Canada, health care and construction jobs accounted for 45 per cent of net job growth in Canada since July 2009, which the report pegs as the end of the last recession.
“Canada has more than recovered all the jobs it lost during the recession. There are, however, big disparities when it comes to job creation by industry,” the board said.
There were 248,000 more jobs in health care and social assistance this past September than there were at the recession’s end, and 207,800 construction jobs were added during that period as well, the board said, citing StatsCan numbers.
Most other sectors of the economy added fewer than 100,000 jobs. Natural resources -- including oil and gas, mining, forestry and fishing -- added 65,100 jobs. Considering that Canada’s labour market has about 15 million jobs, those are unimpressive increases.
Some parts of the economy have shrunk outright. There are 24,600 fewer manufacturing jobs today than there were at the end of the recession. That’s despite the fact that manufacturing output returned to pre-recession levels nearly two years ago.
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Public administration jobs are also down -- no surprise given federal and provincial governments’ belt-tightening in recent years, the Board says.
The report says the health care job boom is no surprise -- it’s a largely demographic phenomenon, having to do with Baby Boomers getting older and not really related to economic conditions.
The construction job boom first started in the recession thanks to government stimulus programs, but then private investment “accelerated and the industry continued to create jobs,” the Board said.
Some economists see a potential risk in the construction job boom. BMO economist Doug Porter recently noted that construction-related jobs are at very elevated levels -- 13.4 per cent of Canada’s economy, compared to 5.8 per cent in the U.S.
“Any time you get to extremes on almost any measure of the economy, you have to start asking serious questions,” Porter said. “Has something fundamental changed to justify this, or is it an accident waiting to happen?”
Porter attributed the concentration of jobs in construction on historically low interest rates and an excessively high Canadian dollar that makes investing in Canadian manufacturing unattractive.