For well over a century now there has been an entire segment of people who’s livelihood is directly connected to the real estate industry in Canada. It’s not an entire dependency on it, but the connections is a fairly arterial one that’s of great importance to their well being in ‘making a living.’ Without going into any unnecessary detail about them, they’re known as the FIRE (finance, insurance, and real estate) sector of the industry, and that industry is the buying and selling of homes in Canada.
Now of course working with the understanding that most of you reading this will be real estate agents, it’s definitely newsworthy to note that Stats Canada has put out some findings recently that indicate the FIRE sector is beginning to take a bit of a beating in Canada. In particular, larger provinces like Ontario, and Quebec have actually seen job losses in the sector number in the thousands in the last few months.
The weight of these undesirable turns doesn’t come down only on realtors, but it’s yet another factor making it difficult for realtors to realize the expectation they have for their business within each quarter of the year. Here at Real Estate Leads, our online real estate lead generation system for realtors is an excellent way to be put more directly in touch with prospective clients. This makes for more in the way of opportunities to make new clients in a current environment where that’s increasingly more challenging to do.
But back to our topic here today, what are the realties of this big hit being taken by the FIRE sector in Canada?
Undeniable Shift
Statistics Canada (Stat Can) data shows FIRE sector jobs made a small decline in June. Aggregate movement was small, but most of the gains that kept the decline from being larger were made in smaller provinces and that should continue to be the case. Larger provinces like Ontario and Quebec lost thousands of jobs in the sector last month.
The home buying and selling industry booms when asset prices rise and / or more interest payers are added, which is an immediate indication that more credit is being issued. It declines when asset prices fall, or credit growth begins to slow down. As manufacturing jobs disappear (and this trend has been picking up steam in Canada over nearly 30 years now) the sector becomes more important to the financial health of the country. The reality is that debt-driven economies like Canada’s are increasingly dependent on this sector.
FIRE Employment Is Flat in Canada
As it stands now here in the first week of July, Canadian FIRE sector employment is virtually flat from the month before. FIRE seasonally-adjusted employment went down to 1.193 million jobs in June, representing a 0.02% decline from the month before. 2014 was the last time a monthly decline for June was seen here. It equates to about 200 jobs lost in the sector, and some Provinces got it much worse than others.
- Ontario – Over 5,000 FIRE sector jobs lost in June, with FIRE seasonally-adjusted employment falling to 577,400 in June, down 0.98% from the month before. The decline equates 5,700 FIRE sector jobs lost in June. This follows 1,300 jobs lost in May. Worth noting that half of all FIRE sector employees in Canada work in Ontario.
- British Columbia – FIRE employment hits all-time high, with FIRE seasonally-adjusted employment growing to 162,000 in June, up a very large 4.99% from the month before. This works out to an increase of 7,700 jobs for the month, the biggest June increase ever. Considering some of the largest declines in real estate sales in the country have been seen in BC recently, this one is hard to make sense of.
- Quebec – Loses over 5,000 FIRE sector jobs. Quebec really did take a significant hit here, with seasonally-adjusted employment falling to 239,600 jobs in June, down 2.12% from a month before. This roughly equates to a loss of 5,200 jobs, and loss numbers of that type haven’t been seen since 2006.
- Alberta – Largest June increase since 2012. Substantial gains in the Province’s FIRE sector were seen last month. Seasonally-adjusted employment reached 105,800 jobs in June, up 2.42% from the month before. This meant somewhere in the vicinity of 2,500 jobs being added.
While the decline in FIRE sector employment was marginal across the country, there’s an interesting trend to be seen here. The country’s largest province by population is experiencing a decline in FIRE sector employment while provinces with smaller populations are seeing that type of employment increase. While net change from all of this probably isn’t going to shake things up too much, there’s very likely going to be regional impacts.
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