In a concerning trend, job vacancies in Canada have seen a steady decline for the fifth consecutive quarter, according to the latest release from the third quarter of 2023. The report reveals a drop of 69,900 job vacancies, accounting for a 9.0% decrease from the previous quarter. This decline marks a continuous downturn since the record high in the second quarter of 2022.
Despite this, payroll employment experienced a 0.7% increase, marking the 10th consecutive quarterly rise. However, the growth in employment has lagged behind the increase in the population aged 15 years and older since the fourth quarter of 2022. The population in this demographic rose by 261,100 in the third quarter of 2023, emphasizing a potential imbalance in the labor market.
The report highlights an interesting shift in the labor market as unemployment rates rise. While job vacancies decrease, the number of unemployed persons increased by 79,500. Consequently, the unemployment-to-job vacancy ratio rose to 1.7, signaling a slight easing in labor market tightness. This ratio, however, remains below pre-COVID-19 levels.
Businesses seem to reflect this trend, with the Canadian Survey on Business Conditions indicating a decrease in the percentage of businesses expecting labor-related obstacles in the next three months—from 47.7% in the third quarter to 40.3% in the fourth quarter. Recruiting skilled employees remains the primary concern for 29.4% of businesses.
Despite the decline in job vacancies, the average offered hourly wage experienced a year-over-year growth of 5.8% in the third quarter of 2023. This acceleration, however, is tempered when compared with the previous year. A shift in the composition of job vacancies towards higher-offered-wage occupations contributed to this increase.
Occupations such as general farm workers and welders saw substantial growth in their average offered hourly wage. Conversely, estheticians and professional occupations in business management consulting witnessed a decline in their offered hourly wages.
Sales and service occupations continue to be the hardest-hit, experiencing the largest quarterly decline of 14.3%, contributing to a 32.6% year-over-year decrease. Food counter attendants and retail salespersons within this category witnessed the most significant drops in vacancies.
Trades, transport, and equipment operators and related occupations also saw a decline for the fifth consecutive quarter. Construction trades helpers and laborers, as well as transport truck drivers, recorded the largest decreases in vacancies within this broad occupational group.
While there were fewer job vacancies in business, finance, and administration occupations, education, law, and health occupations remained relatively stable. Health occupations, however, saw a year-over-year decline for the first time since 2015, driven by specific categories like nurse aides and medical technologists.
A noteworthy finding is the decline in job vacancies across all educational levels. Positions requiring a high school diploma or less experienced the largest proportional decline at 31.3%. Conversely, vacancies for positions requiring a bachelor’s degree or higher fell by 15.2%.
The report also highlights regional disparities, with declines in job vacancies in six provinces and 26 of 69 economic regions. Ontario reported the largest quarter-over-quarter decline, while Southeast, Manitoba, reported an increase in vacant positions. The overall job vacancy rate declined in 54 economic regions year over year.
In conclusion, the decline in job vacancies, coupled with shifts in wage trends and regional variations, suggests a complex and evolving labor market. Policymakers and businesses will need to closely monitor these trends to adapt and respond effectively to the changing dynamics.