Wednesday, October 8, 2008

Canada's jobs juggernaut to hit wall: TD Bank

Canada's economy will only create 30,000 jobs in the next nine months, about one-third of the number created in the first eight months of 2008, according to a new study released by the TD Bank on Tuesday.

A softening Alberta economy plus flagging manufacturing in Canada's heartland means that the once-robust Canadian job creation machine has run out of gas, said Beata Caranci, TD's director of economic forecasting.

"[As] the international headwinds continue to blow alongside softening domestic demand, we believe momentum in job creation will hit a wall," he said in the report.

TD now expects Canada to create roughly one-third the number of new positions in the next three quarters as compared to the first eight months of 2008 when the country added 80,000 new spots to its payrolls.

Of course, 2008 was not all that great from a job perspective.

Historically, Canada creates more than twice as many jobs, or approximately 156,000 new positions, in these eight months, the TD study said.

Three sectors — construction, food service and science and professional services — had produced decent job gains in 2008 so far, 105,000 in food and science professions alone.

But, with the housing market slowing, consumers cutting spending as the all-important Christmas season approaches, and momentum in the professional service area dying, these industries will not be able to sustain much job creation in 2009, Caranci said.

Alberta is already showing signs of slowing, with only 13,000 new jobs created in the January to August period this year compared to 58,000 for the same period a year earlier.

Reduced global oil prices combined with labour shortages have conspired to hurt the Prairie province's economic prospects.

Equally troubling, Ontario, which managed to add 52,000 new jobs in the first eight months of 2008, will find the continued manufacturing crisis too difficult to create many new positions next year, Caranci said.

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