Download Labour Market Information

LABOUR MARKET
INFORMATION
A review of BuildForce Canada’s
labour market model and background for
Construction and Maintenance Looking Forward
Introduction
• The purpose of this review is to:
– review core concepts and the structure of the BuildForce
Canada model
– answer questions about Construction and Maintenance
Looking Forward
– help participants see where their interests are identified
in the system
– explain the tables and figures in the Construction and
Maintenance Looking Forward reports and PowerPoint
presentations, including:
• measures used, methodology and background
• findings and interpretations
Introduction
• The purpose of the BuildForce labour market model is to:
– track the state of construction labour markets across Canada
– promote awareness and discussion about the state of markets
and implications for industry and government initiatives
– offer an analytical tool to industry participants (e.g., “what if?”
simulations)
Introduction
• The purpose of Construction and Maintenance Looking
Forward is:
– to provide annual reports (PDFs and PowerPoint presentations)
on the state of construction labour markets in all provinces and
territories, as well as five Ontario regions
• The reports are based on:
– a current macroeconomic and demographic scenario
– a current inventory of major construction projects
– the views and input of provincial labour market information
(LMI) committees
Introduction
• Construction and Maintenance Looking Forward
is driven by a scenario-based analysis.
– Each forecast is based on several important assumptions.
For example:
• global commodity prices
• lists of very large construction projects in each province
and territory
– One set of these assumptions creates one “scenario.”
– Each scenario is just one of several possible outcomes.
Outline
1.
2.
3.
4.
5.
Core concepts
Model structure
Market adjustments
Rankings and mobility
Frequently asked questions
Core concepts
• The core formulas are:
– Labour force = Employment + Unemployment
– Participation rate = Labour force ٪ Population
Core concepts
• Stocks are measured at one point in time. For example:
–
–
–
–
–
employment
labour force
housing stock
population
registrations
Core concepts
• Flows measure the change in the stocks across a period
of time. For example:
–
–
–
–
–
investment
housing starts
new apprenticeship registrations
apprenticeship completions
immigration
Core concepts
• Statistics Canada measures:
– The reliability of labour market statistics is restricted by:
• smaller markets and limited samples
• respondents who self-identify their occupation and industry
• employment attributed to region of residence
– BuildForce research and LMI committees improve reliability.
Model structure
• Labour markets in the wider economy
Demand
Investment in construction of new buildings and structures, renovation
and repair work, activity in other industries
Construction labour market
Supply
Population by age, gender, education, qualifications, source
(natural increase or immigration), ethnicity and participation
Model structure
• Labour markets in the wider economy
Macroeconomics
Labour requirements
(demand)
Demographics
The available
workforce (supply)
Model structure
• Macroeconomics
International
•
•
•
United States
Canada
Provinces
• Business
investment
• Government
• Households
• Other
Tracking major
projects
Non-residential
investment
• Commercial
• Industrial
• Engineering
• Institutional
Residential investment
• High rise
• Low rise
• Renovations
Labour requirements
(demand)
• Trades
• Occupations
• Managers
Model structure
• Demographics
• Population
• Gender
• Education
• Birth rates
• Mortality
• Immigration
• Age profiles
• Participation
• Mobility
Post-secondary
programs
• Labour force
• New entrants
• Retirements
• In-mobility
The available workforce
(supply)
• Trades
• Occupations
• Managers
Model structure
• Labour markets in the wider economy
Demand – Macroeconomics
Employment
Construction
labour market
Unemployment
Labour supply
Supply – The available workforce
Model structure
• There are two distinct sources of labour requirements
(demand) in the model:
– replacement demand related to retirement and mortality
– expansion demand related to growth in construction activity
• Replacement and expansion demand are measured
for 33 trades and occupations (see next slide)
Model structure
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
Boilermakers
19.
Bricklayers
20.
Carpenters
21.
Concrete finishers
22.
Construction estimators
Construction managers
23.
Construction millwrights and industrial
24.
mechanics
25.
Contractors and supervisors
Crane operators
26.
Drillers and blasters
27.
Electricians (including industrial and power
28.
system)
29.
Elevator constructors and mechanics
Floor covering installers
30.
Gasfitters
31.
Glaziers
32.
Heavy equipment operators (except crane)
33.
Heavy-duty equipment mechanics
Industrial instrument technicians and mechanics
Insulators
Ironworkers and structural metal fabricators and
fitters
Painters and decorators
Plasterers, drywall Installers and finishers, and
lathers
Plumbers
Refrigeration and air conditioning mechanics
Residential and commercial installers and
servicers
Residential home builders and renovators
Roofers and shinglers
Sheet metal workers
Steamfitters, pipefitters and sprinkler system
installers
Tilesetters
Trades helpers and labourers
Truck drivers
Welders and related machine operators
Model structure
• Expansion demand is measured for:
– Industry:
• construction
• all other industries
– Provinces and five Ontario regions:
• Greater Toronto Area
• Southwest Ontario
• Central Ontario
• Northern Ontario
• Eastern Ontario
Model structure
• Expansion demand is driven by construction spending
by sectors:
–
–
–
–
–
–
residential
commercial
industrial
institutional
engineering
maintenance
Model structure
• Expansion demand is driven by construction spending
by sectors:
– the macroeconomic model forecasts spending
– employment is reported for residential and non-residential totals
– specialized analysis tracks project detail
Model structure
Building requirements
Population by age / retirement
Labour requirements
• Employment
• Construction
• Other industries
Unemployment
• Annual
• Peak
• Natural
Available labour force
• Managers
• Contractors/supervisors
• Trades
• Apprentices
Mobility
Sector Region Industry
Training apprenticeship
Available population
Does not identify people by trade
and occupation
Identifies people by trade and
occupation
Immigration
Aboriginals
Women
Youth
Market adjustments
• What happens when conditions change?
– The model has three rounds of adjustments:
1. Unemployment changes
2. Labour force changes
3. Immigration, apprenticeship and other institutional
systems adjust
– The unemployment rate is the first, pivotal point.
Market adjustments
• Unemployment is an essential feature
of the labour market:
– acts as a cushion to absorb shocks
– a social cost across the cycle
– creates benefits in a balanced market
Market adjustments
• First round adjustments
1,400
Unemployment
1,200
1,000
800
600
400
200
0
Year 1
Year 2
Labour force
Employment
Market adjustments
• Unemployment
– There are three different measures:
1. Seasonal
2. Cyclical
3. Natural
Jul-10
Jan-10
Jul-09
Jan-09
Jul-08
Jan-08
Jul-07
Jan-07
Jul-06
Jan-06
Jul-05
Jan-05
Jul-04
Jan-04
Jul-03
Jan-03
Jul-02
Jan-02
Jul-01
Jan-01
Market adjustments
• Seasonal unemployment patterns in Saskatchewan
30%
25%
20%
15%
10%
5%
0%
0%
Aug-76
Aug-77
Aug-78
Aug-79
Aug-80
Aug-81
Aug-82
Aug-83
Aug-84
Aug-85
Aug-86
Aug-87
Aug-88
Aug-89
Aug-90
Aug-91
Aug-92
Aug-93
Aug-94
Aug-95
Aug-96
Aug-97
Aug-98
Aug-99
Aug-00
Aug-01
Aug-02
Aug-03
Aug-04
Aug-05
Aug-06
Aug-07
Aug-08
Aug-09
Aug-10
Market adjustments
• Cyclical unemployment rates for Saskatchewan
35%
30%
25%
20%
Trend
15%
10%
5%
Recession
Peak
Market adjustments
• The normal unemployment rate estimates the annual
unemployment rate in balanced markets.
Market adjustments
• Unemployment rates, heavy equipment operators,
Saskatchewan
20
18
Unemployment, natural rate
16
14
12
10
8
6
4
2
0
2001
2002
2003
Unemployment rate at peak
2004
2005
2006
Unemployment rate, annual average
2007
Market adjustments
• Second round adjustments
Increased
participation
1,600
Other
regions
Other
industries
New
entrants
Increased
labour force
1,400
1,200
1,000
Unemployment
800
600
400
200
0
Year 1
Year 2
Labour force
Employment
Market adjustments
• Change in the labour force:
–
–
–
–
New entrants
Mortality
Retirement
Net in-mobility
Market adjustments
• Change in the labour force
– New entrants:
• number of residents 30 years of age and younger entering
the labour force for the first time
– Determined by:
• change in population (age 30 years and younger)
• construction share of the workforce
• labour market conditions
Market adjustments
• Change in the labour force
– Mortality:
• the number of persons in the local labour force that pass
away during the year based on age-specific mortality rates
Market adjustments
• Change in the labour force
– Retirement:
• the number of persons permanently leaving the labour force
• persons that take a pension and move to another trade or
take contract work are not included
– Determined by:
• the change in participation rates above the age of 55
Market adjustments
• Change in the labour force
– Net in-mobility:
• recruiting required by the construction industry from other
industries, other trades or occupations outside construction
and/or outside other provinces or countries to meet labour
requirements
– Determined by:
• residual labour requirements
– >0 implies recruiting outside
– <0 implies losses to other industries/regions
Market adjustments
• Change in construction labour force in Saskatchewan
5,000
4,000
Total change in labour force n =
New entrants n + Net in-mobility n Retirements and mortality n
2,000
1,000
0
-1,000
-2,000
Net in-mobility
New entrants
Retirements and mortality
2021
2020
2019
2018
2017
2016
2015
2014
2013
-3,000
2012
Number of workers
3,000
Total change in labour force
Rankings and mobility
• Rankings on a scale of 1 (weak) through 5 (strong)
summarize the market conditions.
– Regional rankings are a weighted average of four measures
(see next slide).
– Differences in market rankings signal the potential for mobility.
Rankings and mobility
• Measures:
1. Estimated unemployment rate relative to natural
unemployment rate
2. Employment growth
3. Net in-mobility as a percentage of the labour force
4. Industry survey
Rankings and mobility
• Annual weighting of the criteria:
– Surveys are only applied for one year.
– The weight attached to replacement demand rises in more
distant forecast periods.
– Comments on tables note the potential impacts of mobility.
Rankings and mobility
1
Qualified workers are available in local markets. Excess
supply is apparent. Workers may move to other markets.
2
Qualified workers are available in local markets.
3
Qualified workers in the local market may be limited by
short-term increases in demand. Established patterns of
recruiting are sufficient.
4
Qualified workers are generally not available in local markets.
Recruiting may extend beyond traditional sources and
practices.
5
Qualified workers are not available in local markets.
Competition is intense.
Rankings and mobility
Labour requirements
(Demand)
Labour market rankings
1
2
3
4
5
Significant
excess of
supply over
demand
Excess of
supply over
demand
Moderate
supply
pressures
Significant
supply
pressures
Supply
constraints
Available workforce
(Supply)
Rankings and mobility
• Mobility
– Differences in market rankings indicate the potential for mobility
in the model.
– Dimensions to mobility:
• across industries
• Across provinces
Rankings and mobility
• Adjacent markets for heavy equipment operators
in Saskatchewan in construction
Heavy equipment operators,
Saskatchewan
- Other industries
Heavy equipment
operators, Alberta
- Construction
Heavy equipment operators,
Saskatchewan
- Construction
Heavy equipment operators,
Manitoba
- Other industries
Heavy equipment
operators, Manitoba
- Construction
Rankings and mobility
• Mobility across adjacent labour markets
– A market with unemployment below the natural rate will attract
workers from other markets.
Natural
unemployment rate
16
Unemployment rate
14
12
10
8
6
4
2
0
1 1
2 2
3 3
Market
4 4
5 5
Conclusion
• Remember, the BuildForce Canada LMI system:
– includes the model, reports, PowerPoint presentations,
Construction Forecasts website with detailed investment and
labour market data (www.constructionforecasts.ca)
– depends on industry input to refine reliability and market
assessments
– is a tool that the industry can use for assessing labour
market risks
– includes the Construction Map App website, which tracks the
location and schedule of selected major resource construction
projects across Canada (www.constructionmapapp.ca)
For further information,
contact:
BuildForce Canada
Tel: 613-569-5552
[email protected]
www.buildforce.ca
January 2012