This article originally appears in the London Free Press on January 10, 2020 and is written by Jonathan Juha.
The London area labour market capped a strong second half of 2019 by adding 2,000 jobs in December — a positive trend experts expect will continue in the New Year.
December became the fifth straight month of job gains in the London area, helping bring the region’s unemployment rate down a tick to 5.7 per cent in December from November’s 5.8 per cent, figures released Friday by Statistics Canada show.
That compares to Ontario’s 5.3 per cent rate last month, which improved by 0.3 percentage points over November after the province added 25,000 new positions in December. Nationally, the rate was 5.6 per cent, down 0.3 points with a net gain of 35,000 jobs. That came on the heels of the loss of 71,200 jobs in November, Canada’s biggest monthly job loss in a decade.
But the job surge since August, during which the London-area economy added 19,100 new positions, wasn’t enough to erase a lacklustre start to 2019 that saw six straight months of job losses. That led to the average of total people employed last year, at 251,200, being 1,700 fewer than in 2018.
Key economic indicators, however, such as population growth, construction activity and the housing market, remain strong across the region, leading to analysts’ positive outlook for 2020.
“From our standpoint, both micro- and macro-level indicators are pointing to healthy economic conditions, and that’s a reason to be optimistic,” said Kapil Lakhotia, chief executive of the London Economic Development Corp.
Construction, an industry that has added about 2,200 jobs since 2015, is expected to lead the way in 2020, anchored by such big projects as the construction of a new plant for Maple Leaf Foods, already underway, as well as the high demand for housing.
“When you see new construction happening in residential towers, in subdivisions and industrial areas, new plants being built, all of those things point to companies investing in new facilities, which translates into new employment generation,” Lakhotia said.
The Conference Board of Canada echoes that opinion.
The labour force contraction seen last year was an anticipated correction after a very strong 2018 that saw the London region, which also takes in St. Thomas, Strathroy and portions of Elgin and Middlesex counties, match its lowest-ever unemployment rate, said Chris Heschl, a senior economist with the Conference Board of Canada.
“We expect the economy to bounce back and expand this year,” he said.
According to the research organization’s latest projections, the London economy will grow at a pace of 1.9 per cent in 2020 and 2021, Heschl said.
He pointed to manufacturing, which has also been growing steadily and adding jobs over the last few years, as an industry the board thinks will perform well.
“Since the recession . . . manufacturing has been a steady grower and we still expect that to be the case in the near (future),” he said. “This year, we actually expect manufacturing to sort of reach and exceed its 2005 peak.”
Friday’s jobs report by Statistics Canada also showed other positive signs for the local economy, including the continuous rise of the region’s labour force — the total number of people either working or looking for jobs.
It’s the same situation for the area’s employment rate, which shows the percentage of people employed. That number was 57.6 per cent in December, improved from November’s 57.3 per cent.
But while this figure has been trending up recently, it remains among the lowest of all 35 metropolitan areas monitored by Statistics Canada. It’s a pressing issue examined recently as part of a months-long London Free Press project, Face It.
