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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.

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Labour Market Information






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Slide1

Labour Market Information

A review of BuildForce Canada’s

labour market model and background for

Construction and Maintenance Looking ForwardSlide2

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 interpretationsSlide3

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)Slide4

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)

committeesSlide5

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

.Slide6

Outline

Core concepts

Model structure

Market adjustments

Rankings and mobility

Frequently asked questionsSlide7

Core concepts

The core formulas are:

Labour force = Employment + Unemployment

Participation rate = Labour force

٪

PopulationSlide8

Core concepts

Stocks are measured at one point in

time. For example:

employment

labour

force

housing

stock

population

registrationsSlide9

Core concepts

Flows

measure the change in the stocks across a period of

time. For example:

investment

housing

starts

new

apprenticeship registrations

apprenticeship

completions

immigrationSlide10

Core concepts

Statistics Canada

measures:

T

he

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.Slide11

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

m

arket

Supply

Population by age, gender, education, qualifications, source (natural increase or immigration), ethnicity and participationSlide12

Model structure

Labour markets in the wider economy

Macroeconomics

Demographics

Labour requirements (demand)

The available workforce (supply)Slide13

Model structure

Macroeconomics

International

United States

Canada

Provinces

Business investment

Government

Households

Other

Non-residential

i

nvestment

Commercial

Industrial

Engineering

Institutional

Residential investment

High rise

Low rise

Renovations

Tracking major

projects

Labour

requirements

(demand)

Trades

Occupations

ManagersSlide14

Model structure

Demographics

Population

Gender

Education

Birth rates

Mortality

Immigration

Age profiles

Participation

Mobility

Labour force

New entrants

Retirements

In-mobility

Post-secondary

p

rograms

The available workforce (supply

)

Trades

Occupations

Managers Slide15

Model structure

Labour markets in the wider economy

Demand – Macroeconomics

Supply

The available workforce

Construction

l

abour

m

arket

Employmen

t

Unemployment

Labour supplySlide16

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)Slide17

Model structure

Boilermakers

Bricklayers

Carpenters

Concrete finishers

Construction estimators

Construction managers

Construction millwrights and industrial mechanics

Contractors and supervisors

Crane operators

Drillers and blasters

Electricians (including industrial and power system)

Elevator constructors and mechanics

Floor covering installers

Gasfitters

Glaziers

Heavy equipment operators (except crane)

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 lathersPlumbersRefrigeration and air conditioning mechanicsResidential and commercial installers and servicersResidential home builders and renovatorsRoofers and shinglersSheet metal workersSteamfitters, pipefitters and sprinkler system installers TilesettersTrades helpers and labourersTruck driversWelders and related machine operatorsSlide18

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 OntarioSlide19

Model structure

Expansion demand is driven by construction spending

by

sectors:

residential

commercial

industrial

institutional

engineering

maintenanceSlide20

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 detailSlide21

Model structure

Building

requirements

Labour

requirements

Employment

Construction

Other i

ndustries

Available labour force

Managers

Contractors/supervisors

Trades

Apprentices

Unemployment

Annual

Peak

Natural

Mobility

Sector Region Industry

Youth

Women

Aboriginals

Immigration

Does

not identify people

by

trade and occupation

Identifies

people

by

trade and occupation

Population by age / retirement

Training apprenticeship

Available populationSlide22

Market adjustments

What happens when conditions change?

The model has three rounds of adjustments:

Unemployment changes

Labour force changes

Immigration, apprenticeship and other institutional

systems

adjust

The

unemployment rate is the first, pivotal point.Slide23

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 marketSlide24

Market adjustments

First round adjustmentsSlide25

Market adjustments

Unemployment

There

are three different measures:

Seasonal

Cyclical

NaturalSlide26

Market adjustments

Seasonal unemployment patterns in SaskatchewanSlide27

Market adjustments

Cyclical unemployment rates for Saskatchewan

Recession

PeakSlide28

Market adjustments

The normal unemployment rate estimates the annual unemployment rate in balanced markets.Slide29

Market adjustments

Unemployment rates, heavy equipment operators, SaskatchewanSlide30

Market adjustments

Second round adjustments

New

e

ntrants

Increased

participation

Other

regions

Other

industriesSlide31

Market adjustments

Change in the labour

force:

New entrants

Mortality

Retirement

Net in-mobilitySlide32

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 conditionsSlide33

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 ratesSlide34

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 55Slide35

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/regionsSlide36

Market adjustments

Change in construction labour force in SaskatchewanSlide37

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.Slide38

Rankings and mobility

Measures:

Estimated unemployment rate relative to natural

unemployment

rate

Employment growth

Net in-mobility as a percentage of the labour force

Industry

surveySlide39

Rankings and mobility

Annual weighting of the

criteria:

S

urveys 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.Slide40

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. Slide41

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)Slide42

Rankings and mobility

Mobility

Differences in market rankings indicate the potential for mobility in the

model.

Dimensions to mobility:

across industries

Across provincesSlide43

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

- Construction

Heavy equipment operators,

Manitoba

- Other

industriesSlide44

Rankings and mobility

Mobility across adjacent labour markets

A market

with unemployment below the natural rate will attract workers from other

markets.

1 2 3 4 5

Natural

u

nemployment

r

ateSlide45

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

)Slide46

BuildForce Canada

Tel: 613-569-5552

info@buildforce.ca

www.buildforce.ca

For further information, contact:

January 2012