London-Elgin: 4th Quarter 2003

Labour Market Bulletin
Human Resource Centre of Canada
St. Thomas-Elgin
An Analysis of the St. Thomas-Elgin Area Labour Market
~ October to December 2003 ~

• HIGHLIGHTS
• LABOUR MARKET NEWS

  Agriculture

  Construction

  Manufacturing

  Trade

  Finance, Insurance, Real Estate and Leasing

  Professional, Scientific and Technical Services

  Management, Administrative and Other Support Services

  Health Care and Social Assistance

  Arts, Entertainment and Recreation

  Other Services

  Public Administration

• LABOUR FORCE TRENDS

  Employment by Industry

• LABOUR SUPPLY AND DEMAND

  St. Thomas/Elgin Employment Insurance Claimload

  Ontario Works Caseload

• LABOUR MARKET IMBALANCES
• TERMS AND CONDITIONS OF EMPLOYMENT
• INTERVENTIONS
• Notes to Readers

The St. Thomas HRCC Labour Market Bulletin is a quarterly report produced by the area Labour Market Information Analyst. This bulletin and other LMI products may also be found on our website. (aussi disponible en français)

For further information contact:
Anne Perkins, Labour Market Information Analyst
Telephone: (519) 675-2832 or
Mary Anne Fox, Labour Market Information Analyst
Telephone: (519) 645-4089

Contact Us

Note: In preparing this bulletin, HRSDC has taken care to provide clients with labour market information from reliable sources that is timely and accurate at the time of publication. Since labour market conditions are dynamic, some of the information presented here may have changed since the bulletin was published. Readers are encouraged to also refer to other sources for additional information on the local economy and labour market. Information contained in this bulletin does not necessarily reflect official policies of HRSDC .

An overview of the ST. THOMAS-ELGIN area.

The Winter 2004 issue of Economic Performance and Trends published by the Conference Board of Canada reports that real GDP in the London Census Metropolitan Area (CMA) grew by an estimated 3.2% in 2003 - the highest rate since 1999. The GDP forecast for 2004 is expected to slip slightly to 2.8%.

Employment levels in the London CMA climbed 0.5% in the fourth quarter. All employment increases were seen in part-time positions. Workers over the age of 45 years experienced all of the employment gains. Compared to the fourth quarter of 2002, there were 8,100 more people employed at the end of 2003. The quarterly increase in employment levels, along with a decline in the labour force, resulted in the unemployment rate falling to 6.0% from 7.5% in the third quarter.

All employment gains during the last quarter occurred in the Services-Producing sectors. Due to its seasonal tendencies, employment levels in Agriculture fell by 21.4%. While Construction saw a 6.9% slip during the quarter, year-over-year totals are up 24.5%. Manufacturing, the largest employment sector, fell by 2.2% during the quarter and 1.4% compared to a year ago. The largest quarterly gain (+3,000) was seen in Professional, Scientific and Technical Services - up 41.1%. The largest quarterly losses were seen in Other Services (-1,700) and Public Administration (-1,700).

HIGHLIGHTS

• The value of building permits in both St. Thomas and Central Elgin is higher in 2003 compared to last year.

• The new Starwoods Hotels and Resorts Worldwide Inc. customer contact centre opened in the former Canadian Tire outlet. Close to 150 associates currently work at Starwoods' first Canadian call centre.

• Four stations and 52 staff will be added with the expansion of Thames EMS into St. Thomas and Elgin County.

• New figures from Statistics Canada shows that the median retirement age for all workers fell to 60.8 years in 2001 from 62.0 years in 1996.

• Negotations are underway for 82 full-time and part-time health professionals at St. Thomas General Hospital.

• The Ontario minimum wage increased to $7.15 per hour from $6.85 on February 1, 2004.

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LABOUR MARKET NEWS  
 

Agriculture

Prior to May 2003, Canada was the third largest exporter of beef in the world. On May 20, the discovery of a single case of bovine encephalopathy spongiform (BSE), more commonly known as mad cow disease, prompted most countries, including the U.S., to impose a ban on Canadian beef products. Since that time, industry analysts have been predicting that some trade with the U.S. (live cattle under 30 months and certain cuts of low risk meat) is likely to resume by early 2004, but with the recent detection of a second case of mad cow disease with links to Alberta, hopes of reopening the border have been delayed indefinitely.

A variety of web sites and support services have been established to provide information:

• Canada Ontario BSE Recovery Program 1-877-838-5144

• BSE Help Line 1-888-292-5856

• The Farm Line (Confidential emotional support and referral services) 1-888-451-2903

• www.gov.on.ca/omafra

Local tobacco farmers are dealing with a number of issues, including smaller markets, higher costs and increased taxes on cigarettes. Ontario is home to about 1,000 tobacco producers. The provincial tobacco industry employs nearly 14,000 full-time and seasonal workers, with an economic impact of $513 million - the majority of it in our area.

Construction

The city of St. Thomas issued 33 building permits valued at $3.0 million in October, down from $5.2 million in October 2002. The city has seen building worth $36.0 million for the first 10 months of the year, compared to $33.7 million for the same period in 2002. There were 40 permits issued in November, of which 25 were for single family homes. There were 31 single-family home permits issued in September, and 15 in October. A total of 228 permits had been issued for single family homes by the end of November, down from 239 last year.

In Central Elgin, permits totalled $10.6 million for the first 10 months of the year, a 9.0% increase over 2002.

Manufacturing

Ford Motor Co. announced its intention to eliminate about 1,500 contract workers and 50 salaried employees across North America by the end of 2003. The Ford of Canada plant in St. Thomas has already implemented cost-savings measures. While indefinite layoffs are not expected at the local plant, it will shut down for a total of seven weeks in 2003.

Trade

Openings:

• Econo Printer Cartridges, St. Thomas

• Saan, St. Thomas

Finance, Insurance, Real Estate and Leasing

September home sales in St. Thomas rose 63.8% over September 2002, and the 63 home sales in October were up 43.2% from October 2002. The average selling price in October rose 5.4% to $128,888. Year-to-date sales to the end of October were up 9.7% over 2002.

Professional, Scientific and Technical Services

According to Robert Half Technology, the Information Technology sector will experience a net 10% increase in employment in the first quarter of 2004 (12% of those firms surveyed expect to hire and 2% expect to cut). Market research firm IDC is also forecasting increased spending on IT and growth for the IT sector in 2004. Nortel Networks Corp. saw its first annual profit in six years, and announced that employees can expect to receive both salary increases and bonuses in 2004. Nortel employees have not had raises in two years.

Management, Administrative and Other Support Services

The new St. Thomas Customer Contact Centre officially opened in the former Canadian Tire store. The centre will offer bilingual services for Starwood Hotels and Resorts Worldwide Inc. About 150 associates currently work at the company's first Canadian call centre. In the future, it is expected that a total of 250 people will be employed in both entry and supervisory positions.

Health Care and Social Assistance

The expansion of Thames EMS into St. Thomas and Elgin County will result in the addition of 4 stations and 52 employees by January 1, 2004. Emergency services in Elgin will include three county stations and additional stations in St. Thomas. Thames EMS employs 170 full-time and part-time paramedics. Paramedics must complete a two-year Paramedic Training Program at a community college and pass the Provincial Examination for Paramedics. Those wishing to become Advanced Care Paramedics must take an additional year of training.

The new $1 million East Elgin Medical Facility opened in Aylmer. The centre has room for three doctors and already has a physiotherapist and nurse practitioner on site.

Arts, Entertainment and Recreation

Openings:

• Galaxy Cinema, multiplex in St. Thomas, creating 55 full-time and part-time jobs.

• Ballistick Paintball Park, West Lorne

Other Services

Openings:

• Herbal Magic, Aylmer

Public Administration

The RCMP is reviewing its recruitment practices in order to combat a decline in applications coming at a time of mass retirements. The OPP is facing a similar difficulty - applications received over a five-year period fell from 20,000 ten years ago to 5,500 most recently, when the OPP had 1,500 jobs to fill.

The provincial government will hire 128 contract meat inspectors as full-time and part-time government employees. The inspectors will be members of the Ontario Public Service Employees Union, and will see their hourly wage increase from the $20 they earned as contract workers to the $25 earned by federal inspectors.

The province will hire 33 new water quality workers, including 6 investigators and 20 water quality inspectors (there are currently 81 inspectors). According to the Walkerton Report, the number of employees in the Ministry of Environment dropped from 2,306 in 1990 to 1,374 in 2000.

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LABOUR FORCE TRENDS

Produced by Ray Gormley, Southern Ontario Area Economist

The London area labour market experienced smaller than normal changes during the fourth quarter. A seasonal drop in the labour force combined with a small increase in employment caused the unemployment rate to drop by 1.5 percentage points to 6.0%. Part-time employment surged towards the end of the quarter to bring about the net increase in workers, exceeding seasonal expectations.

Conditions improved in the London area on a year-over-year basis. Employment growth accelerated through the fourth quarter, after slowing since April. Employment was up by 2.7% (6,000) compared with December 2002, exceeding the provincial average growth rate for the first time since June. However, a larger increase in the labour force (3.5% or 8,100) raised the unemployment rate from 5.3% a year ago. The labour force showed higher growth than employment through the second half of the year. Still, the area has seen significant improvement in both its participation rate and employment rate, underscoring gains in the labour market.

Table 1 - London Census Metropolitan Area Labour Force Trends

Employment by Industry

The fourth quarter saw employment gains narrowly concentrated within three industries: Wholesale and Retail Trade; Finance, Insurance Real Estate and Leasing; and Professional, Scientific and Technical Services. Most other industries employed fewer workers compared with the third quarter. The increase within Professional, Scientific and Technical Services reversed a declining trend that began in mid-2002. By comparison, Finance, Insurance, Real Estate and Leasing has been expanding for most of 2003.

On a year-over-year basis, employment growth was concentrated within four industries: Construction; Trade; Finance, Insurance, Real Estate and Leasing; and Management, Administrative and Technical Services. In contrast, Transportation and Warehousing continued to show the largest decline in employment, mirroring a similar trend across Southern Ontario. The decline reflects sharp losses during the first half of the year. Despite showing quarterly growth, employment within the Professional, Scientific and Technical Services industry was down by 22% year-over-year. Employment in that industry spiked in 2002, reaching a historic high of 15,600 in July. While employment in Educational Services also fell, it has remained relatively steady through 2003, fluctuating between 18,000 and 20,000. The Other Services industry showed the only other noteworthy decline, reflecting accumulated losses in the second half of the year.

Statistics Canada's Labour Force Survey (LFS) is the major source of data for this Review. As relatively small sample sizes are utilized in compiling sub-provincial estimates for the survey, there is a chance of variation due to sampling error. Therefore, the reader is cautioned that small changes in some time series could be wholly or partially due to these statistical sampling errors, and may not necessarily reflect actual events in the labour force. Data are three-month moving averages.

Table 2 - London Census Metropolitan Area (CMA) Employment by Industry

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Ontario Works Caseload

During the fourth quarter of 2003, the total number of Ontario Works caseloads in the City of St. Thomas and County of Elgin fell by 2.1%. The third quarter closed with 897 caseloads. During the fourth quarter, total caseloads fell to 878 in December. Compared to December of 2002, total caseloads slipped by 8.6% (-83 caseloads).

LABOUR MARKET IMBALANCES

According to a report from the University of Toronto, two-thirds of the nurses in Ontario are over the age of 40 and many nurses are retiring early due to heavy workloads. In addition, an increasing number of younger nurses are leaving Ontario to secure full-time employment elsewhere, all compounding the growing shortage of nurses. Retirements alone could result in a loss of between 17,000 and 18,000 experienced nurses in Ontario.

According to a recent study from Statistics Canada, the number of women registered in apprenticeship training programs rose 76% from 1995 to 2001, although 70% of them are pursuing trades in food and services, such as cooking and hairstyling. However, female participation has increased in metal fabricating, electrical and electronics, and motor vehicle and heavy equipment, although women still make up less than 3% of all apprentices in these trades. Interest in skilled trades and apprenticeship training has increased across the board, as more individuals become aware of a growing number of opportunities in the trades. Total registrations from both males and females have risen 32% from 1995. Women now account for 9% of registered apprentices, up from 7% in 1995.

2003 Skilled Trades Survey

The Ontario Chamber of Commerce released the results of their December 2003 survey on skilled trades. The results are based on 495 responses from across Ontario. Some of the survey findings include:

• Over 76% of respondents currently employ skilled trades workers or apprentices with 46% employing between one and five skilled trades people.

• Just over 80% of respondents employed between one and five apprentices. Seven per cent employed over 20 apprentices.

• Nearly 50% of respondents reported that their skilled trades workers would be retiring over 15 years from now.

• The three most common sources of apprentices are community college programs (198), internal training programs (151) and hiring from other enterprises (114).

• Over 40% of respondents feel that their organization will face a skilled trades shortage in less than five years. Twenty-nine per cent reported never having a skilled trades shortage.

• The three highest rated causes for shortages of skilled trades workers and apprentices were reported to be 1) skilled trades are not viewed as desirable professionals decreasing the supply of potential candidates (206), 2) education systems' lack of focus on skilled trades has resulted in diminished supply of apprentices (186), and 3) difficulty in attracting apprentices and skilled trades workers (162).

• Suggested solutions to easing the expected skilled trades shortage include raising awareness of careers in skilled trades (263), financial support for employers who train apprentices (219) and promoting the image of skilled trades (180).

Source: Ontario Chamber of Commerce Ontario Business Survey Program, 2003 Skilled Trades Survey

A new report by the Conference Board of Canada states that due to fewer retirements by older women, the expected labour shortages from aging baby boomers will occur after 2010. Boomers, now between 35 and 56 years of age, account for 31% of the population. As boomers approach retirement age, employers will try to find ways to encourage them to remain on the job by offering reduced hours, special assignments, temporary work, job sharing, consulting work and telecommuting. While skilled immigrants will continue to be a source of workers, the demand for qualified labour is a global issue that forces developed countries to compete with each other.

TERMS AND CONDITIONS OF EMPLOYMENT

New data from Statistics Canada shows that the median retirement age for all workers slipped to 60.8 years in 2001, from 62 years in 1996. The median retirement age was 57.6 years for public service employees and 61.7 years for private sector employees. People who are self-employed work until 65 years.

In an effort to address changes in the way work is done, the Canada Labour Code, last revised in 1965, is undergoing a review. With more people working over 50 hours per week - 25% now compared to 10% a decade ago - work-life conflict is a problem facing many employees. The new work environment sees almost 40% of Canadians employed in non-standard working arrangements where they are working part-time, on contract or are self-employed. In 1965, 75% of people worked in a standard job as full-time, permanent employees. Now, just one-third of the workforce is employed in a position with a standard eight-hour day, Monday to Friday, at the employer's workplace.

COMPAS Inc. conducted a poll on language skills for the Financial Post. According to 55% of the business leaders surveyed, individuals who speak more than one language are more likely to find employment more easily. When asked to rank various languages according to their importance to Canadian business over the next ten years, English was ranked first, followed by Chinese, French, Spanish, Japanese, and German.

Update on Wages:

A survey by the Conference Board of Canada suggests that pay increases are likely to be lower in 2004 as companies try to control costs. The projected average increase is 3.2% for non-unionized employees and 2.6% for unionized workers. Firms will face rising pension and health-care benefit costs for the aging workforce.

On February 1, 2004, the Ontario minimum wage will rise to $7.15 per hour, the first increase since the $6.85 level was introduced in January 1995. The Ontario Labour Department calculates that the wage change will effect about 700,000 workers, or about 11% of the workforce. The hourly rate will climb at the beginning of every February until it reaches $8.00 in 2007. Wages for students under 18 years of age will increase to $6.70 in February of next year to a maximum of $7.50 in 2007. Wages for liquor servers will rise from $5.95 to $6.20 in February, and $6.95 by 2007. Minimum wages across the country range from a low of $5.90 in Alberta to a high of $8.50 in Nunavut. The following chart sets out the Ontario increases.

The 82 full-time and part-time health professionals at the St. Thomas Elgin General Hospital have been bargaining for their first contract since October 2002 when they became certified as Local 159 of the Ontario Public Service Employees Union. Included in the local membership are respiratory therapists, lab technologists, dieticians, ECG technicians and continuity-of-care consultants.

Table 5 - Ontario Minimum Wages

Table 6 - Wage Settlements

Table 7 - Wage Settlements - National

Table 8 - Wage Settlements - Provincial

Local

Between January and November of 2003, the London Human Resource office recorded 46 contracts covering Middlesex, Elgin and Oxford Counties using information from the Ontario Collective Bargaining Highlights and local media sources. Based on these 46 contracts, the average settlement increase was 2.9%.

INTERVENTIONS

Effective January 4, 2004, Canadians will be able to apply for up to six weeks of employment insurance benefits in order to care for a gravely ill spouse, child, or parent. The compassionate leave program will be administered by Human Resources Development Canada.

Several organizations in Middlesex and Elgin counties have received federal funding to increase services, hire staff, promote economic development or make loans to small business owners. The agencies benefiting from the funding are the Middlesex Community Futures Development Corp., the St. Thomas Elgin YWCA, Elgin Community Development Corp., the St. Thomas campus of Fanshawe College, Literacy Links South Central, and the Foundation for Rural Living.