Canadian Staffing Industry Outlook
The Canadian Staffing Industry Outlook is published by Timothy Landhuis, Research Manager at Staffing Industry Analysts.
The Key Findings:
- The Canadian economy is expected to grow a modest 1.9% in 2015, but accelerate to 2.5% expansion in 2016. The sharp drop in oil prices in 2H2014 has caused GDP growth in Alberta to shift from 3.9% in 2014 to a projected 0.5% in 2015, dragging down Canada's overall GDP growth. However, in 2015, growth in British Columbia, Ontario, and Quebec is projected to be a relatively healthy 2.8%, 2.9%, and 2.1%, respectively.
- The recent weakness in the Canadian dollar and strength in the U.S. dollar is expected to spur growth in Canada's exports, which comprise roughly 30% of its GDP. Export industries expected to grow include aircraft and parts, industrial machinery, pharmaceuticals, building and packaging materials, and fabricated metal, according to the Bank of Canada. These industries may represent growth opportunities for staffing firms.
- We forecast that temporary staffing industry (which includes staffing suppliers of both T4 recipients and independent contractors) revenue will decline 2% in 2015 to reach a market size of CAD 8.3 billion, in part because of its large exposure to cutbacks in the oil and gas sector. However, we project a rebound to 6% growth in 2016 as our forecast assumes acceleration in GDP growth and stabilization in oil prices. In addition, we forecast 3% growth in 2015 and 8% growth in 2016 in place and search (direct hire, retained search, and temp-to-hire) revenue. The stronger growth rates in place and search are due to our assumption that it has less exposure than temporary staffing to the oil and gas sector.
- We estimate the temporary staffing industry in 2014 consisted of roughly 50% staffing of professional workers and 50% commercial workers (either office/clerical or industrial "blue collar" workers) by revenue. We estimate the following revenue proportions by skill segment of the worker supplied: IT staffing (25% of temporary staffing industry revenue), engineering (14%), finance/accounting (5%), healthcare (2%), and other professional (4%).
- Ontario, Alberta, Quebec, and British Columbia accounted for 96% of Employment Services industry revenue, according to a report by Statistics Canada regarding 2012 activity. In addition, the six largest metro areas—Toronto, Montreal, Vancouver, Calgary, Edmonton, and Ottawa—account for roughly half the population of Canada, making them key locations of staffing demand.
To download your copy of the May 2015 Report, click here.