Canada's Job Outlook Hasn't Been This Good Since Before Oil Crashed

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A larger share of Canadian businesses will hire over the next 12 months than at any time since before oil prices collapsed two-and-a-half years ago, according to a Bank of Canada survey.

The bank's latest business outlook found that the number of companies planning to add staff outnumbered the number of companies planning to reduce staff by the largest margin since the third quarter of 2014, when the oil price collapse was getting underway.

“Both investment and employment intentions recovered and are more broad-based, driven by stronger demand and … the need to catch up following a period of anemic investments and layoffs,” the Bank of Canada said.

employment intentions canada
The share of companies that are planning to hire in the next year outnumbers the share of companies planning to lay off by the largest margin since before oil prices tanked. (Chart: Bank of Canada)

That comes after a lacklustre 2016 for jobs in the country. Despite a strong December in which the country added 54,000 jobs, most of Canada's job growth was in part-time positions. The country added just 60,400 full-time jobs in 2016 in total, a number so low it's statistically insignificant.

The Bank of Canada data suggested that firms also think they'll see an additional boost amid signs the negative impacts of the oil-price collapse have faded.

“The results partly reflect an expected recovery of activity in regions at the epicentre of the oil price shock, where businesses now anticipate at least some sales growth following a period of decline,'' the report said in explaining the optimism.

However, many commodity-related firms still reported weak employment intentions.

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After a slow 2016, Canadian job growth could see renewd life in 2017, according to the results of a Bank of Canada survey. (Photo: Getty Images)

The survey also found when it came to exports many Canadian companies remained concerned about uncertainty linked to the possibility of new protectionist measures in the U.S.

The bank described the views of firms following the Nov. 8 presidential election as “divided.''

The results of the poll, conducted between Nov. 14 and Dec. 5, showed that given this uncertainty few firms have factored in the potential impacts from the outcome of the U.S. election into their sales outlooks.

"Today's report is consistent with an economy that has put the worst impacts of the oil shock behind it.''
— Brian DePratto, TD Economics

Still, the bank said companies had positive expectations about some potential moves by president-elect Donald Trump's incoming administration, which takes office Jan. 20.

“Some are optimistic about the prospect of increased infrastructure and military spending as well as changes to energy policies,'' said the report, which was created after bank officials interviewed senior managers from about 100 companies.

“Others are more pessimistic, often because of the risk of increased protectionism.''

Brian DePratto, a senior economist with TD Economics, said the poll suggests the outlooks for investment and future sales have recovered to levels last seen in 2014 — the year oil prices started their plunge.

“The healing process continues,'' DePratto wrote Monday in a research note to clients.

“If there is a fly in the ointment, it is the reported heightening of uncertainty in light of the U.S. election outcome. Regardless, today's report is consistent with an economy that has put the worst impacts of the oil shock behind it.''

— With a file from Andy Blatchford, The Canadian Press

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