Labour market improvement unlikely to be sustained

Labour market conditions have steadily improved since the economic recovery took hold in mid-2009. This improvement, however, is partly due to a sharp rebound in construction activity. Although residential construction is likely to support employment over the near-term, signs of overbuilding point to an eventual housing correction. Moreover, further declines in commodity prices are likely to have some negative impact on energy sector related construction jobs. Overall, as economic growth slows to around 1.5% next year, we expect the unemployment rate to rise to 8.0% by the end of 2013.