Ottawa-Gatineau leads country in job creation

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Peter Kovessy
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More new jobs were created in the National Capital Region last month than in any other metropolitan area in the country, according to Statistics Canada.

(Stock image)

The positive employment results were seen on both sides of the Ottawa River and came even as the area's largest employer continued to shed jobs.

There were 9,300 more people working in Ottawa-Gatineau last month than in December, easily outpacing the growth in the labour force.

Statistics Canada employment numbers are based on a three-month moving average.

With an addition 7,100 people looking for work last month, the region's unemployment rate fell 40 basis points to 5.9 per cent.

That's the second-lowest unemployment rate in Ontario, after Guelph.

There are now 20,900 more people working in Ottawa-Gatineau than a year ago, an increase of three per cent.

What makes the strong job numbers remarkable is that the increase comes as the federal civil service - the region's largest source of employment - shrinks.

There were 9,000 fewer people working in local public administration positions in January compared to a year ago.

"(January's increase is) not coming from the traditional areas of growth," says Statistics Canada analyst Vincent Ferrao, adding no other city in Canada added as many jobs as Ottawa-Gatineau.

The largest increase in employment came from the professional, scientific and technical sector, which includes fields such as architecture, engineering and accounting.

That category is up by nearly 20,000 workers, year-over-year, and currently sits at 76,000 employees.

The closely-watched technology sector is up by nearly 2,000 jobs over January 2011 to 44,000 employed workers.

The tourism and hospitality sector, generally regarded as the region's third-largest economic sector, is also up. There were 6,800 more people working in the accommodations and food services industry last month, reaching 37,900, than a year earlier.

Health care and social services also posted an increase, as did business support services, which includes workers in fields such as property management, call centres and employment agencies.

The construction industry posted a modest year-over-year decline, shedding 1,200 jobs and falling to 33,900 workers.

It was a different story elsewhere across the country.

Nationally, Canada's economy squeezed out a paltry gain of 2,300 jobs last month as the country's unemployment rate increased due to more people looking for work.

Statistics Canada said the unemployment rate climbed one notch to 7.6 per cent last in January, as the economy continued its struggle to produce jobs in numbers large enough to absorb the increase in Canadians looking for work.

Economists had expected a pop of 25,000 jobs for the month, in part because of the unseasonably warm temperatures could have encouraged more hiring in some industries.

But the increase was much weaker than anticipated, compounded by the 23,700 additional Canadians that joined the labour force, accounting for the climb in the jobless rate.

January was the third month in the last four that saw the unemployment rate increase since last September's 7.2 post-recession low.

"This extends the ugly end to 2011," said Douglas Porter, deputy chief economist with BMO Capital Markets.

"Today's report reinforces the point that Canada's job creation engine is cooling markedly," adding that there is no single factor for the softening trend that has seen employment fall on average during the last four months. The 7.6 per cent unemployment rate is also the highest in nine months.

TD Bank economist Derek Burleton said the recent figures are consistent with an economy fighting to keep its head above water. And he sees little relief in the upcoming months.

"For the year as a whole, we continue to expect average monthly job gains of about 10,000 per month, more heavily weighted to the second half of the year," he advised clients in a note.

The Canadian dollar fell almost one third of a cent to 99.74 cents US on the news.

After a strong start in 2011, employment in Canada has largely stalled since last summer, with only 20,000 or so jobs being added in the last six months.

Over the past 12 months, the economy has produced 129,000 new jobs, or a 0.7 per cent gain in employment, one of the weakest records in a non-recessionary period in many years.

The fall-off in job creation has coincided with generally weaker economic conditions and declining business confidence due to uncertainty in the global situation. Earlier in the week, the agency reported that the economy contracted slightly in November following a flat growth reading in October.

Most economists believe conditions in Canada, as well as job creation, will remain weak throughout 2012.

The strongest indicator in January's report was that number of employees in Canada rose by 39,200, offset by a similar decline in self-employment.

That is usually considered a good sign because in a weak economy, many who can't find work will resort to generating their own jobs even if the pay is lower.

By sector, employment rose in the education, information, culture and recreation, and in other service industries in January.

Meanwhile, there were a big loss of 45,000 workers in the professional, scientific and technical services industries, and construction shed jobs despite the warm temperatures during the month. Manufacturing saw a small pick-up but remains 44,000 down over the last 12 months.

Regionally, there were few major changes in any province except Quebec. After a sharp drop in employment the previous few months, Canada's second most populous province saw 9,500 new jobs added, bringing the unemployment rate down three-tenths of a point to 8.4 per cent.

-With a report from the Canadian Press

Geographic location: Ottawa

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