Real estate, financial sectors lead the recovery

It's been a busy year for veteran Ottawa realtor Carol Charbonneau.

And she hasn't been the only one to benefit as widespread fear at the onset of the "Great Recession" of a collapse of the Canadian housing market ebbed away.

"We still have a high number of realtors and that tells you a lot about the market," she said. "In real estate, you're on commission and if you don't have any money coming in to pay the bills you get out of the business and go looking for another job."

There's "no comparison" with the last major downturn in the real estate market in the 1990s, said Charbonneau, who began her career in residential real estate more than two decades ago at the tail end of the 1980s housing boom.

After a slow start this past year, home sales and prices have moved higher and the number of realtors working the market is up.

True, the Ottawa area real estate market is more stable than most, thanks to the presence of the federal government as the major employer. However, real estate markets across the country have survived the downturn relatively intact, and have either recovered to new highs or at least stabilized.

And that's reflected in the employment numbers in the hot sector.

Nationally, employment in real estate was up by 71,000 or a whopping 35 per cent in the 12 months from October 2008, which was the pre-recession peak for the Canadian job market.

In contrast, overall employment over that 12-month period fell by 400,000 or 2.3 per cent, with most of the losses occurring in the first five months of the downturn.

For all of 2009, overall employment was down 1.4 per cent while employment in real estate, despite some yearend weakness, was still up by nearly 14 per cent.

Byrne Luft, vice president, marketing for Manpower Canada, an employment placement firm, credits historically low interest rates and increased economic confidence for the strength of the real estate job market.

"Interest rates are still very low and you're really starting to see the benefits of that," he said. "Also, the public thinks we're out of the worst of the downturn and that the next move will be rising interest rates and so they're feeling that 'we better buy now.' "

That strength in real estate has also fuelled activity and employment in finance and insurance industries where employment is recovering from a relatively moderate downturn last year, Luft noted.

Luft credits government stimulus planning and spending for strengthening employment in other sectors, including public administration, where the latest national payroll figures show employment was up 3.5 per cent over the previous 12 months.

According to Philip Cross, economist and manager of Statistics Canada's Economic Analysis Group, employment in the services sector overall held up much better than in the goods producing sector during the recession, which is "isn't surprising."

"I don't think anybody would have been looking to employment in manufacturing and construction to lead the recovery," he observed.

According to payroll figures released Dec. 22 for the period ending Oct. 31, the steepest 12-month job loss was in "mining and quarrying, and oil and gas extraction" where employment plunged by more than 18 per cent.

Other big losers were the already deeply depressed forestry industry which shed a further 16 per cent of its jobs, and the shrunken manufacturing sector which lost a further 12 per cent.

While more than five per cent of construction jobs also disappeared over the 12-month period, the outlook for that sector, unlike forestry and manufacturing, is relatively bright, thanks in part to the strength in real estate and in part to the expected flood of stimulus spending on infrastructure, Luft noted.

And Statistics Canada's year-end labour force survey found that already "a notable shift has occurred in construction, which had been on a downward trend ... ."

"A lot of government planning, and a lot of government money, has been injected into infrastructure," noted Luft. "I think employment in infrastructure is going to be huge over the next 10 years."

However, right now it's the combined real estate, insurance and banking sector that is the hot spot for jobs, according to Manpower's year-end survey of employer hiring intentions.

Employers in that sector were the most upbeat about adding to their payrolls during the first quarter of 2010, with a steady hiring pace also expected by employers in transportation and public utilities, public administration and retail.

The overall job market, meanwhile, is slowly improving, with the results of the survey of nearly 2,000 Canadian employers pointing to a "mild" hiring climate through the first quarter of this year.

Luft, however, suspects the recovery in jobs from this recession will be weaker than the recovery from the previous recession when employment got a big boost from the start of the high-tech boom.

Nonetheless, this time around the demand for skilled workers in the information technology sector is still strong, driven in large part by the pressure on companies to become more productive, prompting them to look for the latest high-tech solutions, he added.

(prepared by Eric Beauchesne/Vancouver Sun)