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Help Wanted: Private sector job vacancies, Q2 2017

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August 2017
Ted Mallett, VP & Chief Economist

A sign of tightening labour markets, Canada’s private sector job vacancy rate edged up to 2.6 per cent in the second quarter of 2017. The measure is up 0.2 percentage points from a cyclical low a year ago and has recovered about two-thirds of the loss it had seen since the advent of the resource price crunch at the end of 2014. In total, these estimates represent 330,000 unfilled positions across the country.

Although there has been stability or slight gains in most provinces, the vacancy rates remain well below previous peaks in Alberta (1.8 per cent) and Saskatchewan (2.2 per cent), suggesting that labour markets there are still a long way from pre-downturn levels. A number of other provinces also have vacancy rates in the 2.1 to 2.2 per cent range, including Newfoundland and Labrador, Prince Edward Island, Nova Scotia and Manitoba, but trends there have been smoother.

Vacancy rates remain highest in British Columbia at 3.1 per cent, followed closely by Quebec at 2.8 per cent, which has seen the biggest climbs in recent quarters. Ontario and New Brunswick round out the list with rates of 2.7 per cent and 2.6 per cent respectively.

Among broad industry groupings, rising vacancy rates in Q2 were seen in oil and gas, construction, manufacturing, transportation, and hospitality. In contrast, declining rates showed up in information, arts and recreation, finance and real estate as well as professional services businesses. In addition, small businesses are structurally more prone to higher vacancy rates compared to larger enterprises, which have greater flexibility to move people within their organizations.

The survey shows the continuing clear relationship between job vacancies and a wage-setting response from employers. Businesses with at least one vacancy reported planned average organization-wide wage increases of 2.1 per cent in Q2 2017, while those fully staffed reported planned increases of only 1.6 per cent.

Figure 1: Vacancy rates

Vacancy rates

Figure 2: Vacancy rates by size of business

Vacancy rates by size of business

Table 1: Private sector job vacancies by province, Q2 2017

Private sector job vacancies by province, Q2 2017

Figure 3: Average planned wage increases, Q2 2017

Average planned wage increases, Q2 2017

Figure 4: Vacancy rates by province

Vacancy rates by province

Figure 5: Vacancy rates by industry

Vacancy rates by industry


Notes: methodology and data quality

The current results are based on 2,146 responses from the latest quarter. The series comes from CFIB's Your Business Outlook Survey, which is conducted monthly with a stratified random sampling of ID-validated business owner-operator members.

On the survey, respondents provide the total number of full-time and part-time people currently employed at their business. They are also asked “How many jobs in your firm currently have been vacant for at least 4 months because you have been unable to find suitable employees?” Non-responses are treated as zero vacancies. Vacancy rates are defined as total vacancies, divided by the sum of total employment and vacancies. Data outliers are identified using regression analysis, and then dealt with by capping those vacancies at the 90th percentile level in each business size class.

To account for small quarterly sample sizes, data for the 500+ employment size group are imputed by using the aggregate historical ratios relative to the other business size categories from 2004 to 2017. Aggregate employment and vacancies are then reweighted by province and by industry based on quarterly data from Statistics Canada’s Survey of Employment, Payrolls and Hours (SEPH), subtracting out public sector employment based on custom tabulations from Statistics Canada’s Labour Force Survey (LFS).

National quarterly data are seasonally adjusted and trended using x-12 methodology. To deal with occasional missing data points, provincial and industry sector data are further smoothed before seasonal adjustment, and then re-adjusted afterwards to ensure their totals add up to national figures.

Because of the use of centralized moving averages, new quarterly data may result in revisions of past estimates. For that reason, simple rule-of-thumb statistical margins of error usually reported on surveys do not apply.

Comparison with Statistics Canada’s job vacancy estimates.

Beginning in Q1 2015, Statistics Canada's new Job Vacancy and Wage Survey1(JVWS) is producing vacancy rate estimates that are almost double the previous rates based on the Survey of Employment Payrolls and Hours (SEPH). The JVWS's initial data are now almost identical to CFIB's quarterly figures, largely because they now share closer survey methodologies. Most significantly, Statistics Canada is now surveying owners and business managers in branch locations who are responsible for hiring, rather than head office payroll departments. Key remaining differences are the larger sample size of the JVWS and the seasonally adjusted nature of the CFIB data.