August 10, 2012

Interpreting the Labour Force Survey _______________________1 Kitchener-Cambridge-Waterloo _________________________ 1 Local manufacturing update____________________________ 2

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August 10, 2012

Interpreting the Labour Force Survey

Your quick update on the latest changes in Statistics Canadas Labour Force Survey results for the Kitchener-Cambridge-Waterloo Census Metropolitan Area.

Kitchener-Cambridge-Waterloo
The Kitchener-Cambridge-Waterloo CMA1 lost 2,800 jobs in July, the third consecutive month of local losses (see Figure 1). Employment peaked in April, 2012 at 284,100, but has since declined by 6,200 persons to 277,900 about the same employment level as January 2012. Year-over-year local employment is down 1,700, corresponding almost exactly to an 1,800 person increase in unemployment, with a small 100 person labour force pool increase. While the year-over-year decline of 1,700 jobs is still moderate, it is noteworthy as this is the first time since the end of the recession that employment is down year-over-year for a given month (see Figure 2). The CMAs employment rate of 67.2 per cent is still sixth highest in the country, surpassed by Guelph and Ottawa-Gatineau in Ontario. The participation rate has as usual remained high despite employment losses; the CMA still has labour force participation of 72.4 per cent, the fourth highest rate in the country after Calgary, Edmonton and Guelph.

Kitchener-Cambridge-Waterloo CMA seasonally adjusted employment since the start of the recession
290 280 R2 = 0.737

thousands

270 260 250 240 230

Nov-08 May-09 Nov-09 May-10 Nov-10 May-11 Nov-11 May-12

Employed

Figure 1

Employment trend Source: Statistics Canada, Labour Force Survey

Kitchener-Cambridge-Waterloo CMA year-over-year employment change by month

year-over-year employment change (thousands)

25 20 15 10 5 (5) (10) (15) Oct-08 Apr-09 Oct-09 Apr-10 Oct-10 Apr-11

Peak of the recession

July, 2012 -1.7 thousand

Oct-11 Apr-12

Figure 2
1

Source: Statistics Canada, Labour Force Survey

The Census Metropolitan Area consists of Kitchener, Cambridge, Waterloo, Woolwich and North Dumfries.

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August 10, 2012

The unemployment rate for the Kitchener-CambridgeWaterloo CMA edged up to 7.1 per cent, which is the first time it has been over 7 per cent since May 2011, but it is still lower than the current unemployment rates in London (8.6 per cent), Toronto (8.5 per cent), and Hamilton (7.5 per cent).

The increase in manufacturing employment is surprising given that hiring announcements that positively affect local manufacturing will not be in effect as of the time of this survey. For instance, Toyota will be increasing Lexus production in Cambridge which is expected to create 400 new jobs, but not until early 2014.2 Similarly, RIM is considered a manufacturer so their employment losses would be expected to reduce manufacturing employment as tech workers move into other industries (e.g., Professional services). But while overall employment is down in the CMA, RIM losses are not obvious in the industry breakdown. The biggest losses by industry year-over-year are in Trade (wholesale and retail), and by occupation the biggest losses occurred in Social science, education, government service, and religion. The growth in manufacturing is supported by occupational data as jobs unique to Processing, manufacturing and utilities are up 9,700 year-over-year.

This month at a glance

Unemployment rate 7.1% 7.9% 7.3% 8.3% Employment change -2,800 +10,600 -30,400 +163,000

KitchenerCambridge-Waterloo Ontario Canada U.S.

Note: U.S. and Canadian rates are calculated differently and cannot be directly compared.

Local manufacturing update

thousands

Manufacturing employment in the KitchenerCambridge-Waterloo CMA has been rising steadily since October 2011, reaching a fiveyear high of 61,400 as of July, Kitchener-Cambridge-Waterloo CMA employment 2012. The CMA last posted in manufacturing manufacturing employment over 80 60,000 in August, 2007 (see Figure Current manufacturing 3); however manufacturing then employment 70 constituted 24.1 per cent of total 60 employment and is currently slightly 50 less, representing 21.9 per cent of total employment. 40 These data are not adjusted so a month-to-month comparison is not appropriate, but year-over-year manufacturing employment in the CMA is up 11,400 persons, a 23 per cent increase since July 2011.
30 20 10 0

1996 1998 2000 2002 2004 2006 2008 2010 2012

Source: Statistics Canada, Labour Force Survey

Figure 3

Toyota expanding Lexus production in Cambridge, hiring 400, The Record, July 24, 2012.

Kitchener-Cambridge-Waterloo CMA July Measure 2012 299.2 Labour force (000) 277.9 Employment (000) 21.3 Unemployment (000) 72.4 Participation rate (%) 67.2 Employment rate (%) 7.1 Unemployment rate (%)

June 2012 301.6 280.7 20.9 73.0 68.0 6.9

Standard error 2.0 2.1 1.1 0.5 0.5 0.4

Monthly change divided by standard error -1.2 -1.3 0.4 -1.2 -1.6 0.5