Extending the Labour Market Indicator to the Canadian Provinces

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Calculating the labour market indicator (LMI) at the provincial level provides useful insights into Canada’s regional economies and reveals differing trends in the state of underlying labour market conditions across provinces. Conclusions based on the Canadian LMI do not necessarily translate to the provinces. In most cases, the correlations between the provincial LMIs and the underlying labour market variables have the expected sign. Differences among provinces reflect idiosyncratic differences among provincial labour markets. The values of the provincial LMIs are not invariant to the sample period used when constructing them. We find that using a longer sample estimation period improves the properties of some of the provincial LMIs. Recent values for the LMI show that labour markets have deteriorated notably in Alberta, Saskatchewan, and Newfoundland and Labrador. At the same time, the LMIs for British Columbia, Ontario, Quebec and New Brunswick have improved over the course of the past year and the gap between the unemployment rate and the LMI has tended to narrow.

DOI: https://doi.org/10.34989/sdp-2016-2