Labour squeeze
The anecdotal evidence about severe labour shortages was reinforced by empirical data last week. Statistics Canada reported on Sept. 21 that there were almost 732,000 job vacancies in the second quarter, a record. Most of the openings were in health care, restaurants, and retail (chart below). All of those industries are notorious for demanding a lot of people in return for relatively little pay. It’s possible the pandemic has caused nurses, line cooks, and store managers to decide that they don’t want to return to those sectors. Some are settling for generous emergency benefits, while others have learned new skills and gone to work in other industries. Immigration is also a factor.
But labour shortages are a problem at the high end of the pay scale, too. “We’re really struggling to hire,” Adam Froman, founder and CEO of Toronto-based Delvinia Holdings Inc., a digital research firm, told FP Economy. Talent was tight in the technology industry before the pandemic. It’s worse now because the crisis accelerated the shift to the digital economy, intensifying the demand for labour, and because the new work-from-anywhere culture has made poaching by companies that pay in U.S. dollars or euros commonplace. “Salaries are going up and up and up,” Froman said.
Retail reversion
Retail sales fell 0.6 per cent in July from June, Statistics Canada reported on Sept. 23, the third decrease in four months. Household consumption remains an engine of growth, however. Retail sales have exceeded pre-pandemic levels every month since June 2020, and Statistics Canadas said preliminary data indicate a rebound in August.
Economists reckon consumers are spending more of their disposable incomes on services now that social-distancing restrictions have been eased. For example, spending at restaurants and bars increased 11 per cent in July, Statistics Canada said in a separate report. Our behaviour also appears to be reverting to pre-pandemic patterns, as the most recent data show that we’re back to spending more on automobiles than on food, while sales at hardware stores have dropped to match spending on clothes and footwear for the first time since before the crisis.
