Job vacancies high again in Q2, with wage increases trailing CPI in many sectors
Statistics Canada is again reporting record levels of job vacancies across the country.
In its second quarterly look at trend, it finds that employers across all sectors of the economy were actively looking to fill nearly one million – 997,000 – vacant positions. That figure is the highest quarterly number on record.
Vacancies in the second quarter were up 4.7% (+45,000) from the first quarter, and 42.3% (+296,500) higher than in the second quarter of 2021.
Meanwhile, the job vacancy rate—which tracks the number of vacant positions as a proportion of total labour demand—was 5.7% in the second quarter, which is also an all-time high. Since the first quarter of 2020, growth in labour demand (+4.2%) has exceeded growth in payroll employment (+1.7%), resulting in record high job vacancies.
Disconnect between wage, CPI increases
The record-high number of job vacancies in recent months has focused attention on the extent to which unmet labour demand is associated with higher wages. While the Labour Force Survey provides information on the wages of employees, the Job Vacancy and Wage Survey includes information on offered wages associated with vacant positions.
Overall, average offered hourly wages increased 5.3% to $24.05 in the second quarter on a year-over-year basis. Over the same period, the average hourly wages of all employees rose 4.1%. The consumer price index increased 7.5% in the second quarter, compared with the second quarter of 2021.
On a year-over-year basis, offered wages increased more than the consumer price index in the second quarter in five sectors, including professional, scientific and technical services (+11.3% to $37.05) and wholesale trade (+10.6% to $26.10).
In comparison, increases in offered wages were lower than the CPI in the remaining sectors including retail trade (+5.7% to $17.60); construction (+5.2% to $27.30); and health care and social assistance (+3.6% to $25.85).
The sectors for which growth in offered hourly wages was on par with or below the CPI accounted for 82.9% of total vacancies in the second quarter of 2022.
Accommodation, health sectors report most vacancies, construction unchanged
There were 136,100 job vacancies in the health care and social assistance sector in the second quarter. Although that figure was little changed from the record high of the previous quarter (135,300), it was up 28.8% (+30,500) on a year-over-year basis. The sector’s vacancy rate was 5.9% for Canada as a whole in the second quarter, and ranged from a low of 3.7% in Saskatchewan to a high of 6.7% in Manitoba.
Vacancies in the accommodation and food services sector rose 12.7% (+16,800) to 149,600 in the second quarter, largely offsetting the decline (-18,800) recorded in the first quarter.
The number of vacant jobs in the professional, scientific and technical services sector reached a high of 74,600 in the second quarter, up 7.9% from the first quarter of 2022 and 79.1% higher than in the first quarter of 2020.
Finally, the number of job vacancies in the second quarter in retail trade (112,700), manufacturing (85,900) and construction (82,900) was little changed from their respective record highs of the previous quarter. Together with healthcare and social assistance and accommodation and food services, these sectors represented 56.9% of all job vacancies in Canada in the second quarter.
Number of new hires decreasing
The ratio of new hires to job vacancies—which corresponds to the number of new hires in a given month measured in the Labour Force Survey as a proportion of vacant positions at the start of the month measured in the Job Vacancy and Wage Survey—is an indicator of the difficulties faced by employers in filling vacant positions. A lower ratio suggests a greater degree of difficulty and a lengthier hiring process.
Employers continued to face significant hiring challenges during the second quarter, with 44 newly hired employees for every 100 vacancies. In comparison, there were 113 new hires for every 100 vacancies in the second quarter of 2016.
Sectors where the ratio of new hires to vacancies was low in the second quarter of 2022 included health care and social assistance; accommodation and food services; and construction.