Canadian execs rosy on hiring, but September jobs report expected to be weak

TORONTO – Many Canadian senior executives expect employment levels at their companies to rise, according to a new report released ahead of the latest snapshot of Canada’s employment situation coming later Friday.

The Canadian Institute of Chartered Accountants’ third-quarter Business Monitor found that nearly half, 46 per cent, of CEOs, CFO’s and other top players surveyed said they expect the number of employees at their companies to increase in the next year. That’s up slightly from 41 per cent who said so in the second-quarter survey.

In addition, a growing number, 34 per cent, of executives said they are optimistic about economic performance in the next 12 months, up from 21 per cent in the third quarter.

Most of the executives, 55 per cent, said they were neutral about coming economic performance. And the survey suggests the biggest sources of concern are the state of the U.S. economy, the European debt crisis and general economic uncertainty.

The survey of 230 senior executives was conducted by Harris/Decima between Sept. 6 and 21. The margin of error is plus or minus 6.5 per cent.

The hopeful findings come amid expectations for a muted Labour Force Survey for September, coming later Friday morning.

Economists estimate an average of 15,000 jobs were added to the Canadian economy last month.

And while the figure is below the average 19,900 jobs per month created since the beginning of the year, it would at least indicate that jobs have not been shed as the economy shows signs of slower growth.

August’s jobs report was particularly strong, with the addition of some 34,300 jobs.

However, there were some discouraging underlying trends. All the gains in the August jobs report from Statistics Canada were part-time jobs. As well, there were heavy losses in the goods producing sector, which generally pays higher wages.

With the latest gains, Statistics Canada said employment in Canada has increased by one per cent, or by 177,000 jobs, over the past year, with most of the gains in full-time work.

But global conditions have deteriorated and the domestic economy is also faring worse than expected amid a sharp slowdown in home construction and sales and poor exports.

“Under these circumstances, the chances of disappointing employment growth in September seem fairly high,” said a report from Desjardins Economics, which expects only 5,000 jobs were added.

“That said, given how volatile the results of the labour force survey are, we could get another surprise.”

Meanwhile, CIBC Economist Emanuella Enenajor —who expects an addition of 10,000 jobs for September — suggests the economy may have to pay back some of the strong job gains it has seen so far this year.

“A reckoning may be around the corner, with hiring set to track a slower tempo in the months ahead,” she said.

“Tame demand could see limited need to boost headcounts, while continued government spending cuts will likely weigh on public sector payrolls.”

Economists at TD are even more bearish about the jobs picture in September, expecting to see a loss of some 10,000 jobs.

“After two months of outsized swings in hiring that left the longer term trend in employment effectively unchanged, slowing global growth paired with domestic fatigue is forecast to have contributed to the loss of 10k jobs in September,” it said.

TD Economics expects details of the jobs report to show a more pronounced correction in the service sectors, while the goods producing sectors are expected to remain under pressure from the manufacturing and construction industry.

The unemployment rate is expected to remain at 7.3 per cent.

CIBC says the unemployment rate could track above seven per cent both this year and next.

“We see economic growth as too slow in the quarters ahead to spark a measurable decrease in the jobless rate,” Enenajor said.