08/30/2012 12:16 EDT | Updated 10/30/2012 05:12 EDT

Help-wanted index up in July, points to labour market stability: Conference Board

OTTAWA - Canada's labour market should stabilize with modest employment gains in the coming months after a big drop in July, the Conference Board said Thursday.

The Ottawa-based think-tank said its help-wanted index climbed 9.9 points to 131.3 in July, contrasting with the lack of gain in the first half of the year.

Uncertainty created by the debt crisis in Europe and a potential slowdown in China and the United States have made Canadian employers more cautious about hiring.

The labour market lost 30,400 jobs in July, after weak monthly gains of less than 8,000 jobs in May and June.

However, the Conference Board says its July's Help-Wanted Index suggests that the situation should stabilize, although likely with only modest near-term employment gains. It forecasts a gain of 12,900 jobs in August.

All provinces except Saskatchewan posted index gains in July.

Newfoundland and Labrador's index recorded the biggest jump — 35 points. Nova Scotia's index was up 12.7 points, compared with a 3.6-point decline in June, while New Brunswick’s index increased by 12.1 points, its first major gain in six months. In Prince Edward Island, the index rose 7.1 points.

Most Western Canadian provinces also recorded healthy gains in July. Alberta's index was up 12.6 points — its strongest gain in a year. Manitoba was up 6.7 points and British Columbia 5.7 points.

Saskatchewan fell 10.7 points in July, following an 8.2-point drop in June, not enough to offset the gains recorded in April and May.

Quebec's index posted a gain of 8.4 points and Ontario's index was up 3.4 points.

In a related development, the Conference Board's Indicator of Labour Market Tightness suggested a continuing tightening trend that began earlier this year as the number of job postings and the number of unemployed both increased.

The number of unemployed individuals for every job posted online fell slightly to 1.97 in July from two in June.

Labour markets tightened in five provinces — Newfoundland and Labrador, Prince Edward Island, Nova Scotia, Quebec and Alberta — and loosened in the other five.