Canadian Mining Industry Employment and Hiring Forecasts - MiHR

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• an online portal where stakeholders can conduct sensitivity analyses based on changes to key economic variables • the ability to rapidly produce customized reports upon request This chapter presents forecasts of changes in mining employment and hiring requirements across Canada. Changes in employment by region are calculated using projected fluctuations in commodity price levels and estimates of labour productivity. These employment forecasts are then combined with projected non-retirement separation and retirement rates to produce estimates of hiring requirements. Three scenarios generate employment and hiring requirement forecasts over 10 years. Assumptions The forecasting model used here combines the effects of changes in commodity prices, growth in productivity, retirement rates and non-retirement separation rates, to produce estimates of hiring requirements. Three scenarios were developed to forecast requirements over a 10-year time horizon. Table 6 presents the key assumptions used in model development. (Note that all growth rates in Table 6 are compound annual growth rates (CAGR), with the exception of non-retirement separation rates, which are estimated based on national averages.) Further details on the methodology used for this forecasting exercise are presented in Appendix A. Table 6 Key Forecast Assumptions Assumption Baseline Contractionary Expansionary Rationale Minerals Price Index Iron Ore Price Index Labour Productivity Median Retirement Age Non-Retirement Separation Rate World Bank Forecast, 2009 World Bank forecast less the standard deviation of historical price indices over the past 38 years. World Bank forecast plus the standard deviation of historical price indices over the past 38 years. −0.6% CAGR −4.2% CAGR 1.2% CAGR World Bank Forecast, Jan. 2010 (Note: used IMF growth rate for 2009) World Bank forecast less the standard deviation of historical price indices over the past 25 years. World Bank forecast less the standard deviation of historical price indices over the past 25 years. −3.8% CAGR −7.1% CAGR −1.9% CAGR 1.8% CAGR 1.5% CAGR 2.0% CAGR 59.5 years (Labour Force Survey, Statistics Canada) 59.5 years (Labour Force Survey, Statistics Canada) 59.5 years (Labour Force Survey, Statistics Canada The most reliable long-term forecast The most reliable long-term forecast Canadian Centre for Living Standards data used for baseline estimate; historical standard deviation applied for contractionary and expansionary scenarios Statistics Canada: Median Retirement Age for the Mining Sector (2000–2009) 2.0% 2.0% 2.0% National Average* Source: Mining Industry Human Resources Council, Summer 2010. *For an individual province, the non-retirement separation rate could deviate from the national average, since a worker who leaves the province is lost to the provincial industry even if they are still working in mining sector elsewhere in Canada. 28 Mining Industry Workforce Information Network
In general, model development research demonstrates that most variations in mining employment result from a combination of changes in metal and mineral prices, and in labour productivity. More precisely, the number of mining jobs is strongly related to commodity price levels, changes in productivity levels and the previous year’s employment. There is a strong positive correlation between commodity prices and employment, offset by a negative correlation between labour productivity and employment. In other words, when commodity prices rise, employment levels increase; whereas when labour productivity levels rise, employment levels decrease. Forecasts of hiring requirements require information on non-retirement separation rates and the average retirement age, in conjunction with age distribution of the mining workforce. Consensus forecasts with low, medium and high outlooks for commodity prices were blended to create the contractionary, baseline and expansionary projections. It is assumed that both the non-retirement separation rate (set at 2 per cent) and the median retirement age (set at 59.5 years) will remain constant in all three scenarios over the entire forecast period. 24 Labour productivity estimates, however, vary over the forecast period, based on projected economic changes affecting productivity. Combining the contractionary, baseline and expansionary scenarios for commodity prices and labour productivity with respect to each of the employment drivers used in the model, yields projections for changes in employment in each of the six regions in Canada between 2010 and 2020. Retirement rates are calculated based on the age distribution of the mining workforce for each region, assuming a retirement age of 59.5 years. For Canada as a whole, retirement rates will increase rapidly from 1.9 per cent in 2010 to 3.5 per cent in 2020. Based on the current age structure of their mining workforces, the provinces with the highest anticipated retirement rates by 2020 are Ontario (4.7 per cent) and Quebec (4.3 per cent). The lowest rates are in the Territories (2.8 per cent) and the Prairies (2.7 per cent). As noted above, these differences reflect the current age profile of the mining workforce in each of the regions. Total hiring requirements in any given year are defined as the sum of (i) the change in the number of jobs in the industry due to selected economic factors (changes in commodity prices and productivity) (ii) the number of workers who retire, and (iii) the number of workers who leave the industry for other reasons. National Hiring Requirements Forecasts Forecasts for Canada are produced by aggregating the changes in employment and hiring requirements of the six regions considered in this study. 25 Employment in the Canadian mining industry is expected to continue to decline over the forecast period, due to continuous gains in labour productivity and essentially zero growth in commodity prices. However, given the age composition of the industry, projected retirements and historical non-retirement separation rates, the forecast calls for cumulative hiring requirements of more than half of the current industry workforce by 2020. 24 Readers are advised that an employment and hiring requirements forecasting tool for mining is available at www.mininghrforecasts.ca that allows users to vary these assumptions and see the impact on the resulting forecasts. 25 Forecasting models were developed for all six regions of Canada. No specific model was built for Canada as a whole. 2010 Employment and Hiring Forecasts 29
Page 1 and 2: Canadian Mining Industry Employment
Page 3 and 4: Table of Contents Executive Summary
Page 5 and 6: List of Tables and Figures Table 1
Page 7 and 8: Executive Summary The Canadian mini
Page 9 and 10: Table 1 Total Hiring Requirements F
Page 11: Occupational Forecasts of Employmen
Page 14 and 15: Background A main strategic objecti
Page 16 and 17: The NOC-S system 4 was developed by
Page 18 and 19: Table 4 Canada’s Top 10 Minerals
Page 20 and 21: Figure 3 Labour Productivity and Em
Page 22 and 23: under-represented groups. As noted
Page 24 and 25: Figure 7 Average Benchmark Hourly W
Page 26 and 27: Results from MiHR’s 2010 National
Page 28 and 29: Figure 11 Proportion of Mining Work
Page 30 and 31: In 2010, Women in Mining (WIM) Cana
Page 32 and 33: Immigrants to Canada — particular
Page 36 and 37: Table 7 presents the cumulative cha
Page 38 and 39: Table 9 Cumulative Hiring Requireme
Page 40 and 41: The top occupations in terms of hir
Page 42 and 43: if metal and mineral prices decline
Page 44 and 45: As shown in Figure 17, changes in e
Page 46 and 47: Figure 18 Total Hiring Requirements
Page 48 and 49: Table 17 Cumulative Hiring Requirem
Page 50 and 51: Table 20 shows the occupations with
Page 53 and 54: 4 Discussion In the near future, th
Page 55 and 56: Appendix A This appendix outlines t
Page 57 and 58: Appendix B This Appendix lists the
Page 60: www.mihr.ca • www.mininghrforecas

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