Canadian and U.S. economies are intimately linked. This is why the question hangs so consistently in the air around financial conversations. Will the tanking Yankee financial ship work to sink Canadian markets, too?
American investors historically hold a central role in helping generate economic activity in Canada. Yet little evidence exists that suggests our financial and housing market stability is stimulated by the United States, nor has it done anything to slow our economy.
Since the last big financial quake on the American side of the border, some wonder if this will change now.
Some Recent Statistics:
Recent statistics on Canada’s economy, released through Federal Government reports, show that even though there was a decline in July new employment affected 15,000 people in August, which is very apparent in their payroll reports. Our unemployment rate remained steady at 6.1 percent. Actually, it’s lovely to report that there was actually an increase in employment by 87,000 jobs which can be seen as a +0.5 percent increase. Although this increase is smaller than the +1.3 increase of 2007, these numbers show the reality of our own financial market stability.
Last summer there were employment gains in Saskatchewan and Ontario. This was offset a bit by job losses in Nova Scotia and Manitoba. Employment levels did not change in other provinces. The beginning eight months of 2008, showed gains for workers jobs were in Ontario and the western provinces. This is a bit surprising, eh? [Editors Note: Did she just say eh?... very Canadian] Especially since Ontario is Canada’s manufacturing base. Most of this is in the fast-changing automotive industry.
Increases in manufacturing employment showed up in August. This industry has declined by 14,000 (-0.7 percent), all in the last year, although decreases are smaller when compared to the same period in 2007 (-76,000 or -3.6 percent).
Wages grew at a surprising rate as well. Reports out of “Statistics Canada” showed year over year hourly wage rate growth at 3.8 percent. This is a bit lower than at the start of 2008 when it was 4.9 however experts are satisfied with these numbers. Actually, the national consumer price index showed the increase as slightly above that 3.4 percent.
Construction Leads the Way
In 2008 government reports showed employment in construction was up in August by 19,000 jobs.
This continuing strength has been steady over the years. The gains we saw in August brought construction employment up by 86,000 new jobs (+7.4 percent) over the first eight months in 2008 which established the industry as the fastest growing in our nation.
The majority of job increases are seen in Ontario, British Columbia, and Alberta. Non-residential construction is the booming market at this time. This caused the value of building permits to rise in 2008. Building permit surveys have been tracking this recent growth.
It seems safe to asses that our modern markets are not so affected by the American economic hardships as we may have imagined. It remains wise to track and observe the changes, and since the world markets do affect us in general, it is always a good idea to keep an eye on the goal while paying attention to the game on the field.