Skilled workers to stay in high demand, report predicts

(August 28, 2003) In a report issued just in time for the Labour Day long weekend, Scotiabank says despite a slowdown in employment growth, demand for skilled workers will remain high for the next five years.

“The shift to higher skilled positions demanding higher levels of education is bound to continue, a reflection of the growing international drive to improve competitiveness,” says Adrienne Warren, senior economist at Scotia Economics.

While the Canadian economy is expected to slow down relative to the G-7-leading performance of the past few years, it should remain strong enough to create hundreds of thousands of new jobs.

“Between 1998 and 2002, domestic employment growth averaged 2.4% annually, translating into more than 300,000 net new jobs per year,” says Warren. “The expected rate of GDP growth over the next five years would be consistent with yearly job growth in the range of 1.5%, or 200,000 to 250,000 net new jobs per year.”

The strong dollar and increased foreign competition may have hurt the manufacturing sector — Canada’s traditional source of job creation — but the report says these factors have benefited the fast-growing business services industry.

As manufacturers tried to control costs, they adopted new technologies, a move which has given a boost to the service industry.

In fact, the reports says the leading sectors for job creation in the past five years have not included manufacturing at all, as the economy shifts to a more service-oriented base. Aside from business services, the leading sectors for job creation included construction, arts and entertainment, and information and culture.

Citing the aging population which is moving en masse toward retirement, the report warns there could be a shortage of healthcare workers, university and college instructors, and skilled construction trades. Adding to the pressure of this shortage are government commitments to invest in health, education and infrastructure.

These trends may already be coming to light, as StatsCan released June’s employment data today. Quebec led the country in job creation, with 12,500 net new positions, including 5,100 new jobs in education and 8,600 in health and social services.

Ontario, which has traditional relied heavily on manufacturing, saw the largest provincial net decline of 22,300 positions, largely in retail and hospitality — both industries hit hard by outbreaks of severe acute respiratory syndrome.

Filed by Steven Lamb, Advisor.ca, slamb@advisor.ca