handshaking and exchanging contract documents

Job vacancies continued to hit record highs in several sectors in the first quarter of 2022, Statistics Canada reports.

New data from the national statistical agency indicated that employment vacancies rose by 2.4% to 957,500 in the first quarter. Moreover, vacancies were up 72.3% from pre-pandemic levels.

Several sectors are reporting highs in unfilled positions, including health care, construction, manufacturing and retail trade, the report noted.

For example, job openings in the health care sector have almost doubled since the first quarter of 2020 to a new record high of 136,800, StatsCan said.

Vacancies in the construction sector, meanwhile, have more than doubled from pre-pandemic levels, and have almost doubled in the manufacturing sector.

At the same time, the pool of unemployed workers is shrinking, StatsCan said, with the jobless rate at record lows recently.

“The ratio of unemployment to job vacancies fell to 1.3 in the first quarter of 2022, less than half the level in the first quarter of 2021,” StatsCan reported.

As a result, “employers faced significant hiring challenges during the first quarter” — which is driving wages higher.

“Across all sectors, offered wages were up 2.5% on a year-over-year basis in the first quarter,” StatsCan said, adding that average hourly wages rose by 3.0%.

While wage increases still lag consumer inflation, which rose by 5.8% over the same period, the agency reported that average offered hourly wage increases matched or exceeded consumer inflation in 23 of 40 occupational categories in the first quarter.

CIBC’s deputy chief economist Benjamin Tal doesn’t see the job vacancy situation improving notably anytime soon.

“Wages will have to rise and working conditions will need to improve in order to attract people back,” he said.

BMO economist and macro strategist Benjamin Reitzes explains that Canadian workers are likely to see further wage increases across industries, not just in one or two.

“We’ve seen some upward pressure on wages but nothing too substantial just yet and that could be taste of what’s to come in the months ahead,” he said.

However, there could be a cool off in pay boosts later in the year, Reitzes notes.

“But we’re not there just yet,” he said.

There is evidence that the economy is already starting to slow as real estate prices fall, the stock market faces volatility and the technology sector cuts jobs, amid the backdrop of persistent inflation and rising interest rates.