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June 13, 2009
Toronto’s remarkable resiliency to the 2009 recession
If you exclude manufacturing employment, there were more jobs in Toronto in May 2008 than May 2009, according to the Labour Force Survey produced monthly by Statistics Canada. Jobs in categories that include the financial sector and accounting continue to grow — albeit more slowly than during the boom times.
The last big recession, which occurred in 1991, hit Canada’s largest city of Toronto hard. Not only did manufacturing employment decline, so did jobs in the financial sector as the nation adjusted to a variety of structural changes. Unemployment rates exceeded 12% while the vacancy rate in office buildings reached 20% (7% is considered a normal “balanced” market). So, the resiliency this time was not fully expected.
Although the media remains focused on the automotive manufacturing job losses, bailouts, and related challenges, it’s the other story that intrigues me. What is helping to hold up employment in the other industries?
Various Toronto clusters seem to be holding up well. The financial and accounting sector is being noticed globally and attracting some superstar talent (such as the repatriation of economist David Rosenberg from the defunct Merrill Lynch in USA) as well as the expansion of global operations for organizations like KPMG.
Anecdotally I’ve heard the pharmaceutical sector is doing well and exporting globally.
The jobs numbers that I’ve been looking at (unadjusted for seasonality, sorted by high-level NAICS and NOCs codes, for CMAs) don’t distinguish between part-time and full-time jobs, so it may be that some positions have shifted to part-time from full-time. But this move would suggest that employers in Toronto are trying to hoard talent and retain their skilled workforces, another sign of a vote of confidence in Toronto.
But I live thousands of kilometers from Toronto — for those of you there, what are you hearing and seeing? what industries are propping up Toronto’s economy?
Topics: urban history, clusters, economic development |
June 16th, 2009 at 12:33 pm
This is great news for the small number of acocuntants and financial services employees. horrible news for everyone who is not a pharmacist or a CA.
June 16th, 2009 at 8:21 pm
Perhaps my post wasn’t completely clear — the main declines in jobs are in manufacturing. Most other jobs and industries have held up remarkably well in Toronto. Not much comfort to automotive manufacturing workers, but some comfort to any organization that relies on a strong Toronto.
June 17th, 2009 at 8:59 am
My experience from inside the city is Toronto is finally benefitting from having its light industry gutted after NAFTA was signed. Manufacturing collapsed, and factories in the inner city were left abandoned.
Over the past two decades lots of time and effort has gone into converting those buildings and properties, increasing population density, office space, retail space.
So now in the inner city, most people are employed in “ideas” not physically making things.
R.
June 19th, 2009 at 3:29 pm
I just moved here 6 weeks ago, going to Ryerson in the fall and I thought I would get head start this summer. This would have included getting a jump on a summer job. However, this has been the hardest I have ever worked to find employment. Turned away from Subway and Starbucks for being overeducated, away from anyone else for being under experienced. Turned away everywhere else for going back to school in September. So from my perspective, not knowing anyone in Toronto and not having lived in Canada for a few years even, it has not been good.
Thank god I got into school and have sympathetic parents.
July 8th, 2009 at 12:31 pm
Diversity is our stength. Toronto’s motto not only applies to cultural diversity, but business diversity as well. Food, finance, media, and manufacturing have significant influence on the city, but none dominate it’s economy. The question is what factors bring down Toronto’s economy, not what sustain it. In short the primary factor is instability reflected in high interest rates.
Residents in Toronto (as well as Vancouver) have a greater portion of their incomes going toward housing than other parts of Canada. A shift in interest rate within 5 years affects everyone’s mortgage rates. In the early 90’s interest rates became very high, severly affecting the real-estate market and in turn the business confidence in future growth and opportunities in all markets.
Why were the rates so high in the 1990’s? It starts with the high level of government debt, so high that it would eventual affect Canada’s credit rating. The attempt to pay off that debt with the introduction of the GST, which also introduced inflation. The Bank of Canada’s commitment to keep inflation under 2% by increasing interest rates and maintaining the integrity of the Canadian Dollar. Add to that the uncertainty of a strong Quebec seperatist movement.
Today government debt is low (though rising), Quebec seperatist movement is quiet, and so interest rates are not volatile. The pace of business has not been affected much. Modest growth persists as it has the past 15 years, but compared to several parts of the world Toronto looks like it is booming.
A return of high-interest rate regardless of cause would see a very different Toronto market.
July 21st, 2009 at 2:20 pm
Is there any information on Montreal’s economy in the wake of the recession? I have been to the city recently, and felt that the city was pretty decent shape. I even met future immigrants who were taking French classes, and they told how much of their class is filled with Anglophone Canadians.
My impression of the city, is that it is not a financial hub, but rather an artistic hub. They seem to be the anti-Toronto. I always hear about indy-bands coming out of Montreal and of course Cirque de Sole was started by a Montreal street performer.
It would be cool if I can get some info on that.
July 24th, 2009 at 5:23 am
I haven’t been looking at Montreal’s jobs and economic numbers that closely, but it’s my understanding that it’s fared okay. Very modest losses, particularly in manufacturing, but that’s it.
Montreal has become a very diversified economy, which provides some built-in recession proofing. As you say, there are a variety of artistic-related companies from video games to Cirque du Soleil but there are also lots of jobs in banking, accounting, bio-tech, legal, government, health care, university, etc.
All this said, Montreal tends to have a higher unemployment rate than other parts of Canada even in the boom times. But maybe that’s part of being an “artistic” hub.
Not sure I’d call it the anti-Toronto. But it’s definitely different from Toronto.
August 15th, 2009 at 1:25 am
i am hoping that the global economy would recover from this economic recession. life has been very hard with these massive job cuts.
September 6th, 2009 at 1:01 am
Economic recession created huge unemployment rates around the world. I think the world economy is already on the road to recovery.
November 1st, 2009 at 10:26 pm
the Economic recession made a lot of jobless people in my own country. We could only hope that our economy becomes strong again
December 28th, 2009 at 9:58 pm
Our country had been so much affected by this Economic Recession. there are lots of job cuts and company shutdowns. We are seeing some signs of economic recovery right now and we hope that it would continue.
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February 18th, 2010 at 7:38 pm
during the height of the economic recession, our online and offline business in the US have suffered some major drop in sales. now our sales are getting slowly back to normal.