The January 2025 Labour Force Survey report shows a marked improvement in Canada’s labour market, with an increase in employment and an improvement in employment rates. Here are some key points reviewed:
- Employment: Employment rose by 76,000 jobs (+0.4%) in January, with increases in sectors such as manufacturing and professional and scientific services. Some provinces such as Ontario and British Columbia also saw significant increases in employment.
- Private and public sectors: The private sector saw an increase in the number of workers by 57,000, while public sector employment remained flat. In contrast, the number of self-employed increased.
- Jobs by age group: Employment among young people (15-24 years) increased by 31,000 jobs, as did employment for people of all genders in the core age group (25-54 years). Employment for men aged 55 and over decreased.
- Unemployment Rate: The unemployment rate fell to 6.6%, with the largest decline among young people aged 15 to 24.
- Wages: Hourly wages rose 3.5% year-over-year, indicating a slight slowdown in growth compared to previous months.
- Workers planning to leave their jobs: There is a decline in the share of workers planning to leave their jobs, with only 6.1% of permanent employees indicating they plan to leave their jobs in the next 12 months.
Overall, the report shows continued improvement in working conditions in Canada, despite some challenges faced by young people and new immigrants in the labour market.
Employment in accommodation and food services (+15,000; +1.3%), transportation and warehousing (+13,000; +1.2%), and agriculture (+10,000; +4.4%) also increased in January. Meanwhile, the number of people employed in “other services” (which include personal and repair services) decreased by 1,400, or 1.8%.
The manufacturing sector, which relies on US demand for Canadian exports, accounts for 8.9% of total Canada’s employment
Employment in the manufacturing sector may be particularly vulnerable to changes in tariffs and foreign demand, as it has the largest number of jobs dependent on US demand for Canadian exports. An estimated 641,000 jobs, or 39.4% of manufacturing jobs, are dependent on US demand for Canadian exports (based on the most recent available estimates of value added in exports from the System of Macroeconomic Accounts).
The Labour Force Survey reports that 1.9 million people worked in the manufacturing sector in January, accounting for 8.9% of total employment – the fourth largest sector in Canada.
Employment in manufacturing, as a share of total employment, has been trending downward over the years, especially in the 2000s, but has been more stable since 2010.
In January, private sector employees in manufacturing were more likely to be in full-time (95.3%) and permanent jobs (95.3%) than employees in all industries (82.6% of full-time jobs and 89.6% of permanent jobs). The unionization rate for private sector employees in manufacturing (21.8%) remained higher than the average for all private sector employees (14.9%) but was down from 33.8% in January 2002 (three-month moving averages, not seasonally adjusted).
In January 2025, the average hourly wage for private sector employees working in manufacturing was $34.80, slightly higher than the average of $33.97 for all private sector employees. On a year-over-year basis, wages for manufacturing employees increased 2.2% (not seasonally adjusted).
The automotive manufacturing industry integrates highly with U.S. supply chains; 68.3% of jobs in these industries depend on U.S. demand for Canadian exports.
More than a quarter (26.5%) of automotive manufacturing workers were covered by a collective agreement in January 2025. By comparison, the union coverage rate in the automotive industry was nearly twice as high in January 2002 (49.9%).
Employment gains in many industries
Food manufacturing was the largest manufacturing subsector overall, accounting for 16.4% of total manufacturing employment in January. It was also the largest manufacturing subsector in all provinces except Ontario. This subsector is less dependent on foreign demand, with 28.8% of jobs dependent on U.S. demand for Canadian exports.
Employment in professional, scientific and technical services rose in January (+22,000; +1.1%), the second increase in the past three months. On a year-over-year basis, employment in this industry rose by 66,000 (+3.4%). Construction employment rose by 19,000 jobs (+1.2%) in January, building on a net increase of 47,000 jobs (+2.9%) recorded from June to December 2024. On a year-over-year basis, construction employment rose by 58,000 jobs (+3.6%) in January.
