Canadian Occupational Projection System (COPS)

Industrial Projections (2019-2028)

The current COPS projections were completed in 2019, well before the 2020 COVID-19 outbreak that resulted in exceptional and abrupt economic and labour market disruptions in Canada as well as abroad. However, the focus of the COPS projections is on long-term trends in industrial and occupational labour markets, not on short-term developments. At the moment, these long-term trends are not expected to be affected markedly by the COVID-19 outbreak as its impacts are generally foreseen to be temporary.

Changes in external and domestic drivers of aggregate demand are projected to lead to changes in the pace of growth of industrial output and employment, which in turn will affect occupational labour demand over the period 2019-2028. See the Macroeconomic Outlook (2019-2028) for more information.

Historical and Projected Trends in Real GDP, Employment and Productivity by Aggregate Sector

Figure 1 presents growth in real gross domestic product (GDP) by aggregate sector over the periods 2009-2018 and 2019-2028. It shows that over the period 2019-2028, real GDP growth is projected to slow in the primary and construction sectors, accelerate in manufacturing and remain essentially unchanged in services, resulting in similar growth in total GDP relative to the period 2009-2018.

Figure 1: Real GDP Growth by Aggregate Sector

Bar figure showing the average annual percentage growth of the real gross domestic product over the projection periods 2009-2018 and 2019-2028. The data is shown on the table following this figure

Sources: Statistics Canada (historical) and ESDC 2019 COPS industrial outlook.

Text version of Figure 1: Real GDP Growth by Aggregate Sector

Average annual growth in total real GDP over the period 2019-2028 is projected to be similar to the period 2009-2018, as output growth is expected to slow in the primary and construction sectors, accelerate in the manufacturing sector and remain essentially unchanged in the services sector.

In the primary sector, the slowdown projected in output growth is primarily driven by the weaker pace of growth expected in oil and gas extraction, as uncertainties surrounding future crude oil prices are refraining producers to invest in additional capacity, limiting further increases in production. Anaemic growth in forestry’s output, mainly due to the gradual slowdown anticipated in residential investment in North America, is an additional factor expected to weigh on real GDP growth in the primary sector. Output growth in mining is also projected to weaken somewhat relative to the previous ten years.

The faster pace of growth projected in manufacturing GDP essentially reflects the fact that this sector was severely affected by the global recession of 2008-2009. Canadian production of manufacturing products plunged by 13% in 2009, before increasing at an average annual rate of 2.1% from 2010 to 2018. The resulting pace of growth for the full period 2009-2018 was 0.5% annually, while it is projected to average 1.5% over the period 2019-2028. The new Canada-U.S.-Mexico Agreement (CUSMA) represents a positive development for Canadian manufacturers, reducing trade and investment uncertainties. The relatively low value of the Canadian dollar and better access to European markets through the Comprehensive Economic Trade Agreement (CETA) are also expected to support Canada’s exports of manufactured products over the projection period.

Output growth in the construction sector is projected to weaken relative to the past ten years, reflecting the slower pace of growth anticipated in residential and non-residential investment. The gradual decline in household formation and potential increases in mortgage rates are expected to restrain investment in new housing, while renovation spending and ownership transfer costs are projected to increase at a slower pace due to a softer resale market. Weaker growth in non-residential investment essentially reflects anemic growth in investment related to engineering structures from the resources extraction industries. In contrast, investment growth in commercial, industrial and institutional building construction is expected to accelerate.

Output in the services sector is projected to increase at the same pace as in the past ten years. Growth is expected to be primarily driven by business services and health care, and by the fact that population aging is expected to increase the share of services and lower the share of goods in consumer spending.

Figure 2 presents employment growth by aggregate sector over the periods 2009-2018 and 2019-2028. It shows that employment growth in Canada is also projected to remain similar to the period 2009-2018, as the modest rebound anticipated in primary and manufacturing jobs is expected to be accompanied by slower job creation in construction and services.

Figure 2: Employment Growth by Aggregate Sector

Bar figure showing the average annual percentage growth of employment by aggregate sector over the periods 2009-2018 and 2019-2028. The data is shown on the table following this figure

Sources: Statistics Canada (historical) and ESDC 2019 COPS industrial outlook.

Text version of Figure 2: Employment Growth by Aggregate Sector

Over the period 2019-2028, employment is expected to stabilize in the primary sector, rebound modestly in manufacturing, and keep growing in construction and services, albeit at slower pace than during the period 2009-2018. The resulting rate of growth in total employment is projected to be similar to the previous ten years, averaging 0.9% annually.

After contracting at an average rate of 0.8% annually during the period 2009-2018, employment in the primary sector is expected to stabilize over the projection period, despite the weaker pace of growth anticipated in output. This situation primarily reflects the notable slowdown projected in productivity growth for the oil and gas extraction industry (see next chart for more detail). Following massive job losses resulting from the sharp fall in crude oil prices, employment in support activities related to mining, oil and gas extraction is also projected to rebound modestly due to renewed growth in output. At the same time, employment is expected to decline less severely in agriculture, fishing and forestry. Net job creation for the entire primary sector is projected to be marginal, averaging 0.1% annually.

Employment in the manufacturing sector fell markedly from 2004 to 2010 and remained relatively stable thereafter, resulting in an average decline of 1.1% annually over the period 2009-2018. While the acceleration anticipated in output growth is expected to result in a modest rebound in employment, job creation in this sector will continue to be constrained by automation and the desire of manufacturers to improve their competitiveness on foreign and domestic markets in response to increased international competition, particularly from China. Manufacturing employment is projected to advance at an average annual rate of 0.4% over the period 2019-2028, remaining well below its historical peak of 2004.

Employment in the construction sector increased steadily during the period 2009-2018, recording an average growth rate of 1.6% per year. However, employment growth in this sector is expected to weaken substantially, averaging 0.5% annually, as a result of slower output growth and faster productivity growth.

Employment growth is also projected to weaken in the services sector, despite the fact that output growth is expected to remain similar to the previous ten years. This situation reflects the need to strengthen productivity growth in response to demographic pressures on overall labour force growth. Indeed, with the gradual tightening of the labour market in Canada, employers are expected to replace labour by capital wherever possible. As a result, employment in services is projected to increase at an average pace of 1.0% annually, down from 1.2% over the period 2009-2018.

Figure 3 presents the productivity growth by aggregate sector over the periods 2009-2018 and 2019-2028. It shows that while productivity is projected to keep increasing with technological improvements, growth is expected to slow in the primary and manufacturing sectors and accelerate in construction and services, resulting in similar productivity growth for the overall economy.

Figure 3: Productivity Growth by Aggregate Sector*

Bar figure showing the average annual percentage growth of productivity by aggregate sector over the periods 2009-2018 and 2019-2028. The data is shown on the table following this figure

Sources: Statistics Canada (historical) and ESDC 2019 COPS industrial outlook.
* Note: In this document, the term productivity always refers to labour productivity.

Text version of Figure 3: Productivity Growth by Aggregate Sector

In the projection, productivity for the overall economy is increasing at a similar pace than the past ten years, as faster productivity growth in the construction and services sectors is expected to be accompanied by slower productivity growth in the primary and manufacturing sectors. While productivity will be primarily driven by the sharp straightening anticipated in investment related to machinery and equipment (as described in the macroeconomic outlook), there are reasons to believe that productivity will not be overly strong. The current level of M&E investment still remains below the levels observed prior to the recession of 2008-2009 and it will take time for the Canadian economy to recover to the point where it will lead to stronger productivity growth. Also, the adoption of new applications enabled by technological progress usually requires a period of adjustment before translating into stronger operational efficiencies.

The significant slowdown anticipated in productivity growth for the primary sector mainly reflects low investment from the oil and gas extraction industry (due to uncertainties surrounding future crude oil prices) and the ongoing transition towards non-conventional production methods (oil sands are more labour intensive). That said, the primary sector is still expected to post the strongest growth in productivity across the economy, driven by the increasing use of technological innovations in agriculture, forestry and mining.

The slowdown anticipated in productivity growth for the manufacturing sector can be explained by the fact that a large part of the production process has already been automated in the past decades, leaving less room for further improvement in productivity. Nevertheless, productivity growth should continue to be solid, driven by additional developments in robotics, 3D printing and augmented reality applications.

Most of the acceleration anticipated in productivity growth for the construction sector is projected to come from the residential component. Indeed, population aging is expected to lead to a shift in the composition of housing starts from single-unit homes to multiple-dwellings (apartments and condominiums). Because multiple-dwellings are more capital intensive and require less labour by unit of output, productivity is projected to grow at a faster pace in construction.

In the services sector, the slight acceleration anticipated in productivity growth is driven by rapid advances in digital and cognitive technologies, such as mobile applications, smart systems, machine learning, artificial intelligence and autonomous transportation. Those technologies are expected to boost productivity and increase the number of tasks that could potentially be automated across a wide range of occupations, including human-centric jobs or those requesting a higher level of education.

Figure 4 presents the decomposition of real GDP growth into employment and productivity growth by aggregate sector over the projection period. It shows that productivity is projected to account for most of GDP growth in the primary and manufacturing sectors, and about half of GDP growth in the construction and services sectors, as well as in the overall economy.

Figure 4: Decomposition of Real GDP Growth by Aggregate Sector, Projection 2019-2028

Bar figure showing the decomposition of real GDP average annual growth by aggregate sector over the projection period of 2019-2028. The data is shown on the table following this figure

Sources: Statistics Canada (historical) and ESDC 2019 COPS industrial outlook.
* Note: In this document, the term productivity always refers to labour productivity.

Text version of Figure 4: Decomposition of Real GDP Growth by Aggregate Sector, Projection 2019-2028

Productivity growth is expected to account for 97% of real GDP growth in the primary sector over the period 2019-2028, compared to 74% in manufacturing, 56% in construction and 45% in services. For the overall economy, this ratio is expected to be 47%.

The large shares of GDP growth attributable to productivity in the primary and manufacturing sectors reflect the fact those two sectors are generally more capital intensive and strongly exposed to international competition and globalization. Productivity allows firms to lower production costs and improve competitiveness on foreign and domestic markets.

Inversely, the lower shares of GDP growth attributable to productivity in the construction and services sectors reflect the fact those two sectors are generally more labour intensive. They are also largely oriented towards the domestic market and less exposed to international competition and import penetration.

Figure 5 presents the distribution of real GDP and employment by aggregate sector. It shows that long-term shifts in the industrial structure of the Canadian economy are projected to continue over the period 2019-2028, albeit at a much slower pace than in the past.

Figure 5: Distribution of Real GDP and Employment by Aggregate Sector

Two line figures showing the percentage distribution of real GDP over the period 1998-2028 and employment over the period 1990-2028, by aggregate sector. The data is shown on the table following these figures

Sources: Statistics Canada (historical) and ESDC 2019 COPS industrial outlook. Shaded area = projections.

Text version of Figure 5: Distribution of Real GDP and Employment by Aggregate Sector

Long-term shifts in the industrial structure of the Canadian economy are projected to continue over the period 2019-2028, albeit at a much slower pace than during the previous two decades.

In terms of real GDP and employment, the relative importance of the services sector is expected to increase marginally, with average growth rates in real output and employment slightly exceeding those of the overall economy. By 2028, the services sector is projected to account for 73% of total production and 81% of overall employment.

The remaining three sectors (primary, construction and manufacturing) would account for 27% of total output and 19% of overall employment by the end of the projection period.

Table 1 presents the employment level (in thousands) and its distribution by aggregate sector in 1998, 2008, 2018 and 2028. It shows that the employment distribution is projected to shift somewhat further towards the services sector, which is expected to account for 92% of total job creation from 2018 to 2028.

Table 1: Employment by Aggregate Sector
(in thousands, percentage share of total employment in brackets)
  1998 2008 2018

2028

(Projection)

Change

2018-2028


Primary

713.9

(5.1%)

671.5

(3.9%)

618.3

(3.3%)

621.4

(3.0%)

+3.1

(0.2%)


Manufacturing

2,103.3

(15.0%)

1,927.2

(11.3%)

1,728.4

(9.3%)

1,797.0

(8.8%)

+68.6

(3.9%)


Construction

736.0

(5.2%)

1,232.4

(7.2%)

1,438.9

(7.7%)

1,508.8

(7.4%)

+69.9

(4.0%)


Services

10,494.0

(74.7%)

13,176.2

(77.5%)

14,871.9

(79.7%)

16,474.1

(80.8%)

+1,602.2

(91.9%)


Total

14,047.0

(100.0%)

17,007.2

(100.0%)

18,657.5

(100.0%)

20,401.3

(100.0%)

+1,743.8

(100.0%)

Sources: Statistics Canada (historical) and ESDC 2019 COPS industrial outlook.

More precisely, Table 1 shows that:

Table 2 presents the top- and bottom-three industries in terms of employment size for the years 2008, 2018 and 2028. This table shows that the distribution of employment among the 42 industries covered by COPS is projected to be little changed between 2018 and 2028.

Table 2: Top- and Bottom-Three Industries in Terms of Employment

Figure presenting a table that shows the industries with the largest and smallest number of workers in 2008, 2018 and 2028. The data is shown on the table following this figure

Sources: Statistics Canada (historical) and ESDC 2019 COPS industrial outlook.

Text version of Table 2: Top- and Bottom-Three Industries in Terms of Employment

The three largest employers are projected to remain the same, although the first and second positions are expected to be reversed. Health care is projected to become the largest employer with close to 2.4 million workers by 2028, surpassing retail trade by 134,000 workers. Construction is expected to remain in third position with 1.5 million workers. With a total of 6.1 million workers by the end of the projection period, those three industries are expected to account for 30% of overall employment.

The smallest employers are also projected to remain unchanged, with fishing, hunting and trapping; forestry and logging; and paper manufacturing as the bottom-three industries. By 2028, those three industries are expected to account for only 0.6% of total employment with 52,000 workers in paper manufacturing, 50,000 in forestry and logging, and 13,000 in fishing, hunting and trapping.

Projections for Real GDP, Employment and Productivity in the Primary, Manufacturing and Services Industries

Figure 6 presents real GDP and employment growth among the primary industries over the projection period. It shows that oil and gas extraction is projected to post above average growth in real GDP and employment. Output is expected to grow modestly in mining and support activities, while employment is projected to decline further in agriculture, forestry, fishing.

Figure 6: Real GDP and Employment Growth: Primary Industries, Projection 2019-2028

Scatter figure showing the projected average annual percentage growth of the real GDP and employment in the industries of the primary sector over the period 2019-2028. The data is shown on the table following this figure

Source: ESDC 2019 COPS industrial outlook.

Text version of Figure 6: Real GDP and Employment Growth: Primary Industries, Projection 2019-2028

Despite a notable slowdown in output growth relative to the past ten years, oil and gas extraction is projected to experience among the strongest rates of growth in real GDP and employment within the primary sector over the period 2019-2028. Most of the growth in output is expected to come from the oil sands and the production of liquefied natural gas (LNG) for shipment overseas, starting in the second half of the projection period. However, in the short-to-medium term, the slowdown anticipated in global economic growth, soaring U.S. shale production, and the lack of adequate pipeline capacity will continue to weigh on prices, investment and output in the industry. Further gains in productivity are also expected to restrain employment growth.

After being negatively affected by major investment cutbacks in the energy sector in recent years due to the sharp decline in crude oil prices, production and employment in support activities for mining, oil and gas extraction are projected to stabilize and experience very limited growth over the next decade, primarily reflecting a tepid outlook for crude oil prices and for investment in new oil sands projects. Recent increases in the prices of metals, such as gold and copper, and rising global demand for fertilizers, such as potash, should also result in moderate growth in mining activity. Employment growth in support activities and mining is projected to be similar to that of oil and gas extraction.

Anaemic growth projected in fishing and forestry’s output is expected to be accompanied by further declines in employment. Growth in the forestry industry will be constrained by the gradual slowdown anticipated in residential investment across North America, reduced supply of merchantable timber and difficulties in the paper manufacturing industry. In the fishing industry, supply constraints resulting from various quotas and moratorium imposed on different fish species are the main factors expected to restrain production. The declines projected in forestry and fishing’s employment reflect additional gains in productivity and the difficulty to attract new workers due to youth out-migration from rural and coastal communities.

Employment in agriculture is also expected to keep declining, although output growth is projected to exceed the primary sector’s average, largely driven by additional demand for global food consumption and the growing use of biofuels. Difficulties to attract domestic workers due to the seasonal nature of the industry, its rural location, low wages and long hours have resulted in greater utilization of foreign temporary workers in agriculture activities.

Figure 7 presents the decomposition of real GDP growth into employment and productivity growth for the primary industries over the projection period. It shows that productivity is expected to account for the totality of GDP growth in agriculture, forestry and fishing, and most of GDP growth in oil and gas extraction. Inversely, employment is expected to be the largest contributor to GDP growth in mining and support activities.

Figure 7: Decomposition of Real GDP Growth: Primary Industries, Projection 2019-2028

Bar figure showing the decomposition of real GDP growth among productivity and employment for the primary industries over the projection period. The data is shown on the table following this figure

Source: ESDC 2019 COPS industrial outlook.
* Note: The term productivity refers to labour productivity.

Text version of Figure 7: Decomposition of Real GDP Growth: Primary Industries, Projection 2019-2028

Productivity growth is expected to account for the totality of GDP growth in agriculture over the period 2019-2028. In forestry and fishing, the decreases anticipated in employment are projected to be accompanied and offset by equivalent increases in productivity, allowing these two industries to maintain their respective level of production relatively constant from 2019 to 2028 (anaemic or slightly negative growth in real GDP).

In agriculture, forestry and fishing, productivity is expected to be driven by further consolidation, mechanization and computerization of operations. Technological innovations include the use of drones to monitor crops and land area, driverless tractors guided by geo-positioning satellite devices, automated systems for pest management, data-intensive applications for optimal seeding and fertilization, self-learning milking machines, biometric sensors to examine animals, nautical and hydraulic lifting equipment, advanced vessels and gear designs, and better fish detection equipment using computer-aided methods. The development of new wood-based products, such as biofuels, biochemicals and biopolymers, is also expected to increase the value added and boost productivity in the forestry industry.

Productivity growth is expected to account for most of GDP growth in oil and gas extraction, primarily reflecting the fact that the production capacity in oil sands is increasing while becoming less labour intensive. Technological innovations have boosted productivity in this industry due to major developments in hydraulic fracturing and horizontal directional drilling techniques, GPS surveying, three-dimensional data maps, airborne technologies, remote-operated equipment, automated loading and transportation systems, robotics and seismic mapping and imaging. According to Suncor, the company’s operation costs per barrel of oil have declined by about 20% from 2012 to 2018 (Suncor, Report to Shareholders for the Fourth Quarter of 2018).

Productivity is projected to grow modestly in mining and to decline in support activities. As a result, employment is expected to be the largest contributor to GDP growth in mining and the sole contributor to GDP growth in support activities. The marginal or negative contribution of productivity to output growth reflects the fact that, in recent years, GDP growth was often similar to or below employment growth in mining and support activities. This trend is projected to continue over the projection period.

Table 3 presents the projected change in employment for the primary industries between 2018 and 2028. It shows that the three industries related to mining, oil and gas extraction are projected to account for the totality of net job creation in the primary sector.

Table 3: Projected Change in Employment: Primary Industries (in thousands)
Rank Industry Employment
in 2018
Employment
in 2028
Average
Annual
Growth
Cumulative
Change
1 Support Activities for Mining/Oil/Gas 91.7 97.0 +0.6% +5.3
2 Mining 88.5 93.6 +0.6% +5.1
3 Oil and Gas Extraction 92.0 97.0 +0.5% +5.0
4 Forestry and Logging 51.9 50.4 -0.3% -1.5
5 Fishing, Hunting and Trapping 16.4 12.6 -2.6% -3.8
6 Agriculture 277.7 270.7 -0.3% -7.0
  TOTAL - PRIMARY SECTOR 618.3 621.4 +0.1% +3.1

Sources: Statistics Canada (historical) and ESDC 2019 COPS industrial outlook.

In the primary sector, employment gains in industries related to mining, oil and gas extraction are projected to be largely offset by additional losses in forestry, fishing and agriculture, resulting in a net job creation of only 3,100 between 2018 and 2028.

Support activities for mining, oil and gas are expected to experience the largest gains in employment, up by 5,300, followed closely by mining (+5,100) and oil and gas extraction (+5,000).

Employment in support activities for mining, oil and gas is expected, however, to remain significantly below its historical peak of 126,000 workers recorded in 2013 (i.e. prior to the oil price shock of 2014-2015).

Agriculture is expected to experience the largest decline in employment, down by 7,000, followed by fishing (-3,800) and forestry (-1,500).

Figure 8 presents real GDP and employment growth among the manufacturing industries over the projection period. It shows that fabricated metals and machinery are projected to post the strongest growth in real GDP and employment over the period 2019-2028, followed by aerospace, rail, ship and other transportation equipment.

Figure 8: Real GDP and Employment Growth: Manufacturing Industries, Projection 2019-2028

Scatter figure showing the projected average annual percentage growth of the real GDP and employment in the industries of the manufacturing sector over the period 2019-2028. The data is shown on the table following this figure

Source: ESDC 2019 COPS industrial outlook.

Text version of Figure 8: Real GDP and Employment Growth: Manufacturing Industries, Projection 2019-2028

Most of Canada’s manufacturing industries rely on exports and are exposed to international competition. Consequently, global and U.S. economic conditions, exchange rates, trade agreements, import penetration and globalisation strongly influence the performance of those industries.

Fabricated metals and machinery are projected to post the strongest growth in real GDP and employment over the period 2019-2028, primarily driven by the sharp straightening anticipated in investment related to machinery and equipment (M&E) in Canada and a positive outlook for exports.

Aerospace, rail, ship and other transportation equipment is also projected to post solid growth in output and employment. This industry is expected to benefit from rising global demand for commercial and business aircraft, particularly from the emerging markets. Increased road congestion and environmental concerns are also expected to sustain world demand for public transit systems, including rail.

Primary metals and minerals products (such as bricks, glass, iron and steel), plastics and rubber products, and chemical products are all projected to post above average growth in production and employment, partly reflecting the acceleration anticipated in manufacturing activity and the construction of commercial, industrial and institutional buildings in Canada, as well as a positive outlook for exports.

Paper manufacturing and printing activities are projected to post the weakest growth in output and employment, primarily because the increasing use of electronic media should continue to restrain demand for paper and printed materials. Additional job losses are expected in these two industries.

Production and employment growth in textiles, clothing, leather and furniture is expected to be constrained by the intensification of foreign competition and the shift in production to low-cost producers, while growth in wood products is expected to be constrained by the gradual slowdown anticipated in residential investment in North America.

In computer and electronic products, renewed growth in output and employment is expected to be primarily driven by rising demand for high-end control, navigational and measuring devices.

Modest growth projected in output and employment for motor vehicles, trailers and parts partly reflects slower growth anticipated in vehicle sales in Canada and the United States relative to the past decade.

In food and beverage products, healthy growth in foreign demand is expected to offset some of the weakness anticipated in domestic demand due to demographic factors.

Figure 9 presents the decomposition of real GDP growth into employment and productivity growth for the manufacturing industries over the projection period. It shows that productivity is expected to account for the totality of GDP growth in four (out of 13) manufacturing industries, and the largest part of GDP growth in all other manufacturing industries, restraining job creation significantly in the sector.

Figure 9: Decomposition of Real GDP Growth: Manufacturing Industries, Projection 2019-2028

Bar figure showing the decomposition of real GDP growth among productivity and employment for the manufacturing industries over the projection period. The data is shown on the table following this figure

Source: ESDC 2019 COPS industrial outlook.
* Note: The term productivity refers to labour productivity.

Text version of Figure 9: Decomposition of Real GDP Growth: Manufacturing Industries, Projection 2019-2028

Productivity growth is expected to account for the totality or the largest part of GDP growth in all manufacturing industries over the period 2019-2028. This reflects the fact that employment in those industries is largely composed of routine tasks that can be increasingly automated with new applications enabled by technological progress. The solid pace of growth anticipated in machinery and equipment (M&E) investment is expected to increase the amount of capital and technology available per worker, boosting productivity.

Some of the most innovative technologies that are expected to transform manufacturing operations and improve productivity over the projection period are:

Table 4 presents the projected change in employment for the manufacturing industries between 2018 and 2028. It shows that metal fabrication and machinery along with food and beverage products are expected to account for 61% of net job creation in the manufacturing sector.

Table 4: Projected Change in Employment: Manufacturing Industries (in thousands)
Rank Industry Employment
in 2018
Employment
in 2028
Average
Annual
Growth
Cumulative
Change
1 Fabricated Metal Products and Machinery 269.7 296.9 +1.0% +27.2
2 Food and Beverage Products 299.0 313.3 +0.5% +14.4
3 Miscellaneous Manufacturing 116.7 125.0 +0.7% +8.3
4 Primary Metals and Mineral Products 125.0 132.7 +0.6% +7.7
5 Chemical Products 102.8 110.1 +0.7% +7.3
6 Aerospace, Rail, Ship and Other Transp. Equip. 84.7 91.5 +0.8% +6.8
7 Plastics and Rubber Products 98.6 104.8 +0.6% +6.2
8 Motor Vehicles, Trailers and Parts 163.8 168.5 +0.3% +4.7
9 Computer, Electronic and Electrical Products 111.2 114.4 +0.3% +3.2
10 Textiles, Clothing, Leather and Furniture 128.6 128.8 0.0% +0.2
11 Wood Product Manufacturing 106.4 102.6 -0.4% -3.9
12 Printing and Related Activities 61.6 55.9 -1.0% -5.8
13 Paper Manufacturing 60.1 52.5 -1.4% -7.7
  TOTAL - MANUFACTURING SECTOR 1,728.4 1,797.1 +0.4% +68.7

Sources: Statistics Canada (historical data) and ESDC 2019 COPS industrial outlook.

Among the thirteen manufacturing industries, employment is projected to increase in ten industries and to decline in three industries, resulting in a net job creation of about 69,000 in the overall manufacturing sector between 2018 and 2028.

Industries expected to experience the largest gains in employment (in terms of number) are not necessarily those expected to show the strongest growth rates in employment (in terms of percentage). This is because the size of employment differs significantly across the industrial breakdown, with industries having a much larger number of workers than others.

As a result, fabricated metals and machinery along with food and beverage products are expected to account for 61% of net job creation in the manufacturing sector.

Total employment in the sector is projected, however, to remain well below its historical peak of 2.3 million workers recorded in 2004, resulting in a deficit of about 500,000 jobs by 2028.

Figure 10 presents real GDP and employment growth among the commercial services industries over the projection period. It shows that computer systems design is projected to post the strongest growth in real GDP and employment over the period 2019-2028, followed by legal, accounting and consulting services.

Figure 10: Real GDP and Employment Growth: Commercial Services Industries, Projection 2019-2028

Scatter figure showing the projected average annual percentage growth of the real GDP and employment in the industries of the commercial services sector over the period 2019-2028. The data is shown on the table following this figure

Source: ESDC 2019 COPS industrial outlook.

Text version of Figure 10: Real GDP and Employment Growth: Commercial Services Industries, Projection 2019-2028

Most of Canada’s commercial services industries rely on the domestic market, with consumer spending and business activity as the main drivers of demand for such services. Tourism activity is also a key driver for some specific services (transportation, accommodation, food, entertainment).

Computer systems design and related services are projected to post the strongest growth in output and employment over the period 2019-2028. This industry is expected to benefit from rapid technological innovations and the need for firms across a wide range of sectors to continually upgrade their IT infrastructure to remain competitive. Cyber security, cloud-based platforms, big data, Internet of Things, 5G network implementation, video game development, virtual and augmented reality, machine learning and artificial intelligence, fintech/insurtech and blockchains represent a multitude of growth opportunities.

Legal, accounting and consulting services are also projected to post above average growth in production and employment, benefiting from the increasing trend in business-to-business outsourcing and growing demand for professional advice on planning, logistics, mergers, acquisitions, environmental regulations and implementation of new technologies.

Above average output growth in architectural, engineering, design, and research and development (R&D) services reflects the faster pace of growth projected in non-residential building investment and the sharp straightening anticipated in business investment related to machinery and equipment as well as intellectual property (including R&D). Finance, insurance and real estate are also expected to post significant growth in output, although the pace of growth is projected to weaken relative to the past decade due the gradual slowdown anticipated in final domestic demand, particularly in residential investment and consumer spending.

Above average employment growth in management, administrative and other support services; arts, entertainment and recreation; food services; and air, rail, water and pipeline transportation reflects higher labour intensity in those industries relative to most other commercial services industries.

The remaining industries are projected to post below average growth in output and employment. Postal, courier, warehousing and storage services are expected to post the weakest growth in output and among the lowest growth in employment, as this industry will continue to be affected by the extensive use of e-mail, electronic billing and online advertising. However, the growing demand for parcel delivery and warehousing services resulting from the increased adoption of e-commerce by households and businesses should help to support continued expansion in the industry.

Figure 11 presents the decomposition of real GDP growth into employment and productivity growth for the commercial services industries over the projection period. It shows that productivity is expected to account for a large part of GDP growth in many commercial services industries. This excludes, however, industries that are more labour intensive such as food services and arts, entertainment and recreation services.

Figure 11: Decomposition of Real GDP Growth: Commercial Services Industries, Projection 2019-2028

Bar figure showing the decomposition of real GDP growth among productivity and employment for the commercial industries over the projection period. The data is shown on the table following this figure

Source: ESDC 2019 COPS industrial outlook.
* Note: The term productivity refers to labour productivity.

Text version of Figure 11: Decomposition of Real GDP Growth: Commercial Services Industries, Projection 2019-2028 (average annual growth, in percentage)

Productivity growth is expected to account for a large part of GDP growth in many commercial services industries over the period 2019-2028. Because those industries are the largest employers of the Canadian economy, the weaker pace of growth anticipated in the working-age population will force businesses to strengthen productivity and eventually replace labour with capital in response to the gradual tightening of the labour market.

Rapid advances in digital and cognitive technologies are expected to support productivity and alleviate some of the labour market pressures resulting from demographic factors. Major developments in online and mobile applications, smart systems, artificial intelligence, machine learning and autonomous transportation are expected to increase the number of tasks that could potentially be performed or complemented by technology across a wide range of services occupations, including human-centric jobs or those requesting a higher level of education.

For example, e-commerce, e-banking, and online insurance and housing services have improved productivity and restrained labour demand in retail trade and finance, insurance and real estate over the past decade. This trend is expected to amplify over the projection period with new applications arisen from advanced technologies, such as inventory software, warehouse robotics, self-serve kiosks, automated online customer support (chatbots), smart price tags (that can be changed in real time), indoor positioning and detection systems (beacon technology), fintech, insurtech, blockchain transactions, artificial and virtual agents, etc.

The advent of digital platforms supporting the on-demand economy such as Airbnb and Uber, and the growing use of streaming platforms such as Netflix and Spotify, are also transforming the ways services are provided. Those platforms are challenging the traditional ways of delivering services, particularly in the accommodation, transportation and cultural industries.

A number of commercial services industries remain, however, less subject to technological disruptions as they are generally more labour intensive. Food services and arts, entertainment and recreation services are characterized by a large number of human-centric jobs that are unlikely to be performed or complemented by technology. Head cooks, artists and professional athletes are relevant examples.

Table 5 presents the projected change in employment for the commercial services industries between 2018 and 2028. It shows that food services are expected to create the largest number of jobs in commercial services, followed by computer systems design and finance, insurance and real estate.

Table 5: Projected Change in Employment: Commercial Services Industries (in thousands)
Rank Industry Employment
in 2018
Employment
in 2028
Average
Annual
Growth
Cumulative
Change
1 Food Services 1,045.7 1,160.7 +1.0% +115.0
2 Computer Systems Design and Related Services 409.1 515.0 +2.3% +105.9
3 Finance, Insurance and Real Estate (FIRE) 1,173.9 1,275.9 +0.8% +102.0
4 Legal, Accounting and Consulting Services 673.6 771.4 +1.4% +97.8
5 Retail Trade 2,138.3 2,133.9 +0.4% +95.6
6 Management, Administrative and Other Support 777.1 870.4 +1.1% +93.3
7 Repair, Personal and Household Services 802.9 862.5 +0.7% +59.6
8 Arts, Entertainment and Recreation 444.5 498.2 +1.1% +53.7
9 Truck and Ground Passenger Transportation 516.1 560.8 +0.8% +44.7
10 Wholesale Trade 656.3 699.0 +0.6% +42.7
11 Architectural, Engineering, Design, R&D Services 384.2 419.7 +0.9% +35.6
12 Air, Rail, Water and Pipeline Transportation 264.6 293.0 +1.0% +28.4
13 Information, Culture and Telecommunications 342.4 360.8 +0.5% +18.3
14 Accommodation Services 189.3 201.6 +0.6% +12.4
15 Postal, Courier, Warehousing, Storage Services 210.2 219.5 +0.4% +9.3
16 Electric, Gas and Water Utilities 144.8 149.7 +0.3% +4.9
  TOTAL - COMMERCIAL SERVICES 10,172.0 11,092.3 +0.9% +920.3

Sources: Statistics Canada (historical data) and ESDC 2019 COPS industrial outlook.

Employment is projected to increase in all sixteen commercial services industries between 2018 and 2028, resulting in the creation of about 920,000 jobs.

Industries expected to experience the largest gains in employment (in terms of number) are not necessarily those expected to show the strongest growth rates in employment (in terms of percentage). This is because the size of employment differs significantly across the industrial breakdown, with industries having a much larger number of workers than others.

As a result, food services are expected to create the highest number of jobs, followed by computer systems design and related services, and finance, insurance and real estate. Those three industries alone are projected to account for more than one third (35%) of total job creation in commercial services by 2028.

It is also worth noting that the computer systems design and related services industry, which is relatively small in terms of employment size, is expected to create more jobs than the very large retail trade industry.

Figure 12 presents real GDP and employment growth among the non-commercial services industries over the projection period. It shows that health care is projected to post the strongest growth in real GDP and employment across non-commercial services over the period 2019-2028, followed by social assistance and elementary and secondary schools.

Figure 12: Real GDP and Employment Growth: Non-Commercial Services Industries, Projection 2019-2028

Scatter figure showing the projected average annual percentage growth of the real GDP and employment in the industries of the non-commercial services sector over the period 2017-2026. The data is shown on the table following this figure

Source: ESDC 2019 COPS industrial outlook.

Text version of Figure 12: Real GDP and Employment Growth: Non-Commercial Services Industries, Projection 2019-2028

Canada’s non-commercial services industries largely consist of government and para-public services. Such services strongly rely on public finance and demographic factors.

Health care is projected to experience the strongest growth in output and employment over the period 2019-2028, in response to the growing demand from an aging population as many baby-boomers will be entering in their costliest health care years. The commitments of many provinces to reduce wait times at emergency rooms and for surgical procedures and specialized treatments are also expected to boost government spending, output and job creation in health care institutions. However, labour shortages in high demand occupations represent significant challenges.

Social assistance is also projected to post above average growth in production and employment. The gradual pick up anticipated in early childhood population (aged 1 to 4) and faster growth in youth population (aged 5 to 17) are expected to result in additional demand for child care and family services. Further increases in the dependency ratio resulting from an aging population is also expected to boost demand for elderly care services and senior citizen centres.

Output and employment growth in elementary and secondary schools is expected to be primarily driven by stronger gains in population aged 5 to 17, resulting from additional growth among the 5 to 11 years old and renewed growth among the 12 to 17 years old. In comparison, output and employment growth is expected to be significantly weaker for colleges, CEGEPs, vocational schools and universities, largely reflecting the adverse impact of demographic factors. Population aged 18 to 24 has been stagnant since 2013 and is projected to fall significantly in 2019, before picking up gradually during the projection period. It will take, however, several years until population in this age group fully recovers, weighing on college and university attendance. That said, the growing demand for higher educated and skilled workers across the economy should continue to push up enrolment rates in post-secondary education.

In public administration, growth in output and employment is projected to be lowered by fiscal constraints. Population aging is expected to erode the federal and provincial tax bases, while simultaneously putting further pressures on the health care system, limiting the ability to expand expenditures in government programs and public administration. In addition to the moderate pace of growth anticipated in output, the need to improve efficiency and productivity growth in the government machinery is expected to restrain job creation in public administration.

Figure 13 presents the decomposition of real GDP growth into employment and productivity growth for the non-commercial services industries over the projection period. It shows that employment is still expected to account for a large part of GDP growth in all non-commercial services, as such activities are generally more labour intensive than in most of the goods-producing and commercial services industries.

Figure 13: Decomposition of Real GDP Growth: Non-Commercial Services Industries, Projection 2019-2028

Bar figure showing the decomposition of real GDP growth among productivity and employment for the non-commercial industries over the projection period. The data is shown on the table following this figure

Source: ESDC 2019 COPS industrial outlook.
* Note: The term productivity refers to labour productivity.

Text version of Figure 13: Decomposition of Real GDP Growth: Non-Commercial Services Industries, Projection 2019-2028

Employment growth is still expected to account for a large part of GDP growth in all non-commercial services over the period 2019-2028, as such activities are generally more labour intensive than most of the goods-producing and commercial services industries.

The measurement of output and productivity in non-commercial services also differs from the other sectors of the economy where goods and services are traded and more easily valued in monetary terms. Consequently, the term productivity in the government and para-public sectors is often associated with improved efficiency and effectiveness of an activity.

Nevertheless, productivity (or efficiency) is projected to account for an increasing part of GDP growth in most non-commercial services. The weaker pace of growth anticipated in the working-age population, combined with fiscal constraints, will force governments and para-public institutions to improve effectiveness and implement new labour-saving ways of delivering services, particularly in health care where labour shortages are expected to persist.

New models of services delivery include the expansion of the private sector involvement in the provision of health care services, the growing use of home care for terminally ill patients, and the consideration of permitting nurses and pharmacists to perform services that used to be provided by doctors. Technology is also playing an important role in almost all processes, including patient registration, data monitoring, lab tests and self-care tools. Smartphones and tablets are starting to replace conventional monitoring and recording systems, and people are now given the option of undergoing a full consultation in the privacy of their homes. Services are being taken out of hospital walls and integrated with user-friendly accessible devices.

In educational services, productivity (or efficiency) can be influenced by factors such as the ratio of students per teacher, the availability of online courses and e-learning applications for post-secondary education, or the use of educational tablets, virtual labs, electronic textbooks and online resources in elementary and secondary schools.

In public administration, fiscal challenges are the main factors expected to lead to the creation of more efficient models to improve government program management and public services delivery.

Table 6 presents the projected change in employment for the non-commercial services industries between 2018 and 2028. It shows that health care alone is projected to account for two-thirds of job creation in non-commercial services, followed distantly by social assistance, and elementary and secondary schools.

Table 6: Projected Change in Employment: Non-Commercial Services Industries (in thousands)
Rank Industry Employment
in 2018
Employment
in 2028
Average
Annual
Growth
Cumulative
Change
1 Health Care 1,903.8 2,368.6 +2.2% +464.3
2 Social Assistance 502.9 585.4 +1.5% +82.5
3 Elementary and Secondary Schools 782.3 858.5 +0.9% +76.2
4 Public Administration 967.0 1,006.4 +0.4% +39.4
5 Colleges, CEGEPs and Vocational Schools 280.7 292.8 +0.4% +12.1
6 Universities 262.3 270.5 +0.3% +8.1
  TOTAL - NON-COMMERCIAL SERVICES 4,699.0 5,381.8 +1.4% +682.8

Sources: Statistics Canada (historical data) and ESDC 2019 COPS industrial outlook.

Employment is projected to increase in all six non-commercial services industries between 2018 and 2028, resulting in the creation of about 683,000 jobs.

Health care is expected to experience the highest growth rate (+2.2%) and the largest gains in employment (+464,000), accounting for more than two-thirds (68%) of total job creation in non-commercial services.

Social assistance and elementary and secondary schools are expected to be distant followers, with the creation of about 83,000 and 76,000 jobs, respectively.

Comparisons of Employment Projections across Industries

Figure 14 presents the industries that are projected to post the strongest growth in employment over the period 2019-2028.

Figure 14: Industries Projected to Post the Strongest Growth in Employment, 2019-2028

Bar figure showing the industries that are projected to post the strongest growth in employment over the period 2019-2028. The data is shown on the table following this figure

Source: ESDC 2019 COPS industrial outlook.

Text version of Figure 14: Industries Projected to Post the Strongest Growth in Employment, 2019-2028

Industries projected to post the strongest growth in employment (i.e. above or around 0.9% annually) are also those projected to post the strongest growth in production or those that are characterized by a high degree of labour intensity. Below are some of the key drivers expected to support output and job creation in those industries:

Figure 15 presents the industries that are projected to post moderate growth in employment over the period 2019-2028.

Figure 15: Industries Projected to Post Moderate Growth in Employment, 2019-2028

Bar figure showing the industries that are projected to post moderate growth in employment over the period 2019-2028. The data is shown on the table following this figure

Source: ESDC 2019 COPS industrial outlook.

Text version of Figure 15: Industries Projected to Post Moderate Growth in Employment, 2019-2028

Most of the industries projected to post moderate growth in employment (i.e. below 0.9%, but above 0.4% annually) are also those projected to post moderate growth in production.

This group includes six manufacturing industries and six commercial services industries. It also includes construction and the three industries related to oil, gas and mining extraction.

In addition to moderate growth in production, job creation in those industries is expected to be restrained by the following factors:

Figure 16 presents the industries that are projected to post the weakest growth or declines in employment over the period 2019-2028.

Figure 16: Industries Projected to Post the Weakest Growth or Declines in Employment, 2019-2028

Bar figure showing the industries that are projected to post the weakest growth or declines in employment over the period 2019-2028. The data is shown on the table following this figure

Source: ESDC 2019 COPS industrial outlook.

Text version of Figure 16: Industries Projected to Post the Weakest Growth or Declines in Employment, 2019-2028

Most of the industries projected to post the weakest growth or declines in employment (i.e. around or below 0.4% annually) are also those projected to post the weakest growth in production.

This group is largely composed of manufacturing and primary industries that have experienced a stagnation or a declining trend in output and/or employment over the past several years, such as textiles, clothing, furniture, agriculture, forestry, wood products, printing, paper and fishing. Such industries are expected to face similar challenges than those experienced in the last decade, including:

Output and employment growth is also projected to be weak in a number of commercial and non-commercial services industries. The main factors expected to weigh on those industries are:

Figure 17 presents the ten industries that are projected to post the largest increases in employment (in thousands) over the period 2019-2028. It shows that among the 42 industries covered by COPS, those ten industries are expected to account for about three quarters of total job creation in Canada over the projection period.

Figure 17: Industries Projected to Post the Largest Increases in Employment, 2019-2028

Bar figure showing the industries that are projected to post the strongest growth in employment over the period 2019-2028. The data is shown on the table following this figure

Source: ESDC 2019 COPS industrial outlook.

Text version of Figure 17: Industries Projected to Post the Largest Increases in Employment, 2019-2028

Future changes in the level of employment by industry can be decomposed in two components:

This means that the ten industries expected to create the largest number of jobs are not necessarily those expected to show the strongest growth rates in employment.

For example, the retail trade industry is expected to create a significant number of jobs, despite the weak rate of growth projected in employment (Figure 16). This simply reflects the large size of this industry relative to other industries. The same arguments apply for finance, insurance and real estate as well as construction, which are also expected to post substantial gains in employment, despite moderate growth rates in employment (Figure 15).

Gender Analysis

For more details on the historical and future performance of the 42 industries covered by COPS, including key drivers of GDP and employment growth, please consult the Industrial Summaries.
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