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B.C. employment stays flat in April

B.C. employment rose just 0.1% to 2.48 million during April. The slight increase follows three months of erosion and continues a flat performance since last summer. That said, B.C.
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B.C. employment rose just 0.1% to 2.48 million during April. The slight increase follows three months of erosion and continues a flat performance since last summer.

That said, B.C. still managed to outpace a flat national performance in which most other provinces posted losses. A 1% drop in the Vancouver census metropolitan area (CMA) led the pullback, offsetting traction elsewhere in the province. Changes in most industries were insignificant. The exceptions were declines in the finance, insurance, real estate, rental and leasing sector – which fell 4.1% from March – and business support services. Significant offsetting gains were observed in transportation and warehousing (up 3%), professional/scientific and technical services.

While hiring has stagnated, a labour shortage might be a factor. B.C.’s unemployment rate remained low at 5% but rose 0.3 percentage points from March as more people searched for work. Unemployment in Metro Vancouver is even lower at 4.5%. With elevated labour force participation rates, low unemployment and stellar employment growth in 2017, employers are having difficulty finding workers and are adapting in part by extending hours worked, which is lifting full-time employment at the expense of part-time gains. Wages continue to rise with year-over-year growth in hourly wages clocking in near 6%.

Housing starts in B.C. were lower in April following a surge in March apartment starts. Total urban-area starts declined to a seasonally adjusted annualized rate of 38,750 units, down 16.7% from 46,500 in March and led by the Metro Vancouver area. Despite the pullback, the trend remained robust and has held above a 40,000-unit pace since the second half of 2017. Strong pre-sale activity in past years, reflecting high levels of demand for relatively affordable units in urban areas, downsizing and investment demand, continues to underpin project starts.

Demand, however, is being curtailed by tighter credit conditions, namely higher mortgage rates, and more stringent mortgage lending criteria for federally regulated financial institutions. Provincial government housing market policy has also added to uncertainty. These factors have already led to a slump in resale market activity while a decline in single-detached housing starts may also reflect a pullback in custom homes and speculative building.

Through the first four months, urban housing starts tracked 11% above same-period 2017, pointing to another robust year of housing construction. Multi-family starts are up 15%, while detached starts slipped. Growth is driven by a 14% increase in the Vancouver CMA despite the April dip and a 30% increase in Victoria. •

Bryan Yu is deputy chief economist at Central 1 Credit Union.