Employment growth in B.C. improved in July but continued to underwhelm, according to the latest Labour Force Survey results.
Arresting a downward trend observed since the beginning of the year, July employment rose 0.5% (11,200 persons) to 2.47 million persons to mark the highest level since April, led by full-time job gains. Growth was concentrated outside the Vancouver census metropolitan area, where employment contracted 0.5% from June. National employment growth came in at 0.3%.
Services-producing sectors underpinned July’s gain with a 6.9% (8,700-person) increase in the information/culture/recreation group, and a 2.7% (3,900-person) gain in the finance/insurance/real estate group. Manufacturing and utilities were partial offsets.
Despite July’s gain, average employment was virtually unchanged from a year ago, and year-to-date growth remained at a sluggish 0.8% through seven months. Losses in agriculture, information and culture, transportation and warehousing, and the finance, insurance and real estate group have offset growth in construction, utilities, professional services and health care and social assistance. Factors such as a slowing resale market may be affecting real-estate-related services, with strong housing construction, major projects and a growing population continuing to lift other sectors.
While the recent employment lull is disappointing, it is more a reflection of intensification of labour shortages and a skills mismatch rather than a poor economy. Full-time employment is firm while part-time and self-employment has eased, pointing to more gainful employment opportunities.
B.C.’s economy is operating at or near full employment, boasting an unemployment rate of 5% in July, which was by far the lowest in the country. Excluding Kelowna, metro area unemployment rates are below 5% and B.C.’s job vacancy rate is the highest in the country, suggesting ease in finding employment if desired. Hourly wages are up 5% year-over-year, compared to a 3.2% national increase.
It should also be noted that the Labour Force Survey is only one measure of employment. Statistics Canada’s Survey of Employment, Payrolls and Hours shows year-over-year non-farm payroll growth in the 3% to 4% range this year. The reality is likely somewhere between the two survey results.
Non-residential building intentions in B.C. have slumped in the second quarter, eroding gains in prior quarters. After gaining modestly in May, dollar-volume permits fell 7.8% to $296 million. A 40% fall in industrial permits since May was the main drag. •
Bryan Yu is deputy chief economist at Central 1 Credit Union.
