Sectors and skills; what’s in demand and what’s contracting
Bank of Canada interest rates decision
On July 30, the Bank of Canada opted to keep its overnight policy rate at 2.75%, its third straight hold since March, signaling both caution and flexibility amid mounting trade uncertainty and softening growth prospects. With inflation steady near 2% (but core inflation hovering around 2½% to 3%), the door remains open to rate cuts later in the fall, depending on how trade and economic data evolve.
With rates unchanged, expect modest labour market cooling in the coming months. Economic growth is likely to remain soft but positive, and job gains may slow, pushing the unemployment rate gradually upward toward 7% .
What sectors and skill sets are still in demand? Which ones are contracting?
Still in demand:
Health care & social assistance: Resilient public-sector hiring remains strong, especially for nurses, aides, and support staff.
Education services: Continued government support keeps demand steady for teachers, administrative personnel, and early childhood educators.
Professional, scientific & technical services: Firms offering digital transformation, engineering, and data analytics are still hiring technical talent and digital professionals.
Information & cultural industries & business services: Tech and creative firms, especially in Toronto, Montreal, and Vancouver, continue adding roles in software, media production, and finance-support services.
Pulling back:
Manufacturing: Roughly 44% of manufacturing jobs depend on U.S. goods exports. Weakness in this sector is contributing significantly to rising layoffs .
Mining, oil & gas extraction: Similarly, roles tied to U.S. demand—chiefly in mining and energy—face ongoing headwinds .
Wholesale trade & transportation/warehousing: Nearly 20% of export‑tied jobs live here; trade disruptions are likely reducing hiring in logistics and supply‑chain segments.
Retail and hospitality: Elevated rates continue to dampen consumer spending, restraining new hiring in retail and food services, especially beyond seasonal peaks.
Skill sets in demand:
Digital, technical, and data analytics—from web development to AI-related specialties—remain sought after.
Healthcare credentials (RNs, PSWs, medical technologists).
Education-related skills, particularly English/French bilingualism, early childhood, and special education.
Project management, supply-chain coordination, and adaptability to cross-border regulatory changes.
Geography matters: Regional strength and strains:
Growth regions:
Toronto, Montreal, Vancouver: With core finance, tech, education, and public services fueling job growth, these metro areas offer relative labour market strength.
Public sector hubs: Ottawa and provincial capitals continue to add roles in administration, healthcare, and education.
Pressure zones:
Industrial and export-heavy regions (e.g., Windsor–Essex, Sault Ste. Marie)—where auto, steel, forestry and chemicals concentrate—face job losses tied to tariffs and slowed U.S. demand.
Resource-dependent economies (Alberta, Saskatchewan, and parts of Newfoundland and Labrador) are showing weaker momentum where export work is vulnerable.
Potential pathways: scenarios and signals to watch.
The BoC outlined three potential tariff‑led trajectories:
Status‑quo tariffs: A mild GDP contraction in Q2, modest recovery later in 2025, and job growth tightening — the current case.
De-escalation: Lower tariffs would lift trade volumes, reduce inflationary pressure, and boost hiring across export-exposed sectors.
Escalation: U.S. tariff increases could tip Canada back into recession, hitting jobs and investment sharply .
All that said, markets currently anticipate a first rate cut in September, with another possible by year-end—depending on inflation and trade clarity.