Quarterly economic report reveals first consecutive quarterly job losses in province since 2009
Manufacturing jobs in Ontario are at their lowest point since data was first collected nearly 50 years ago, according to a new report by the province’s Financial Accountability Office (FAO).
The FAO, which provides independent analysis of Ontario’s finances and economic trends, released its quarterly economic review on Nov. 26, painting a stark picture of decline across Ontario's industrial base. Although manufacturing gained 9,000 jobs in the quarter, the sector has plunged to its lowest share of employment in Ontario — below 10 per cent — since that data was first collected in 1976.
Overall employment in the province declined by almost 2,000 jobs in the third quarter, after losing 38,000 jobs in the previous quarter, marking the first back-to-back quarterly job loss since mid-2009, according to the report. Excluding pandemic-related disruptions, this represents the most consecutive quarterly job losses the province has experienced in more than 15 years.
Auto industry among hardest hit
The two-year picture is even more concerning. Workers in auto, machinery, and metal products have 20,600 fewer jobs compared to two years ago. The hardest-hit sectors reveal where HR leaders should expect the most significant workforce disruptions: the auto industry (-18.3 per cent), machinery (-14.8 per cent) and primary and fabricated metal products (-9 per cent), the report said.
While recent U.S. tariffs have dominated headlines, the FAO's analysis reveals that manufacturing's decline runs much deeper. Manufacturing has faced challenges including pandemic-related shutdowns, supply-chain disruptions, shipping issues, auto plant retooling, slowing demand, along with the U.S. tariffs.
Earlier this year, the Ontario government pledged $11 billion to support employers and workers affected by U.S. tariffs, by deferring certain provincially administered taxes for six months.
U.S. manufacturing loses jobs
The U.S. manufacturing sector is also struggling, with the latest report — delayed due to the recent government shutdown — revealing a loss of 6,000 jobs in September and a total of 58,000 fewer manufacturing jobs since April.
Real manufacturing activity in Ontario is at its lowest level since 2015, excluding the pandemic period, the FAO said in the report. It specifically noted that manufacturing output declined in seven of the past eight quarters between mid-2023 to mid-2025, a period that predates the Trump administration's tariff threats.
Beyond manufacturing, Ontario's overall labour market shows signs of stress that should concern businesses across all sectors. Long-term unemployment — those looking for work or laid off for 27 weeks or more — accounted for 28.5 per cent of total unemployment, the highest share since 1996, according to the FAO. This represents a significant increase in workers facing extended job searches, suggesting that recent layoffs may have longer-lasting impacts on labor market recovery than typical cyclical downturns.
The FAO report carries implications that extend well beyond the manufacturing sector itself. Supply chain companies, logistics providers, equipment manufacturers, and service providers that depend on a robust industrial base all face potential headwinds.
