Employees across most B.C. industries enjoyed higher paycheques in June, according to the latest Survey of Employment, Payrolls and Hours.
Average weekly earnings rose 0.6% from May. The gain exceeded the national gain of 0.3% but B.C.’s year-over-year increase of 2% trailed the national increase of 2.8%. At $963.19, the province’s average weekly earnings were fifth highest in the country.
Earnings in 16 of 20 industries rose from May, led by higher-paying goods-producing sectors like forestry and logging, utilities and manufacturing. The services-producing sector, which makes up most overall employment, recorded average weekly earnings growth of 0.4%, with notable gains in accommodations and food services and art, entertainment and recreation, which support the tourism sector. Information and culture wages rose 8.1% to $1,362, which could reflect rising wages in the tech sector.
Despite June’s increase, the trend has been flat through most of 2018. While a housing slowdown is a factor, the lull is a puzzle given strong gains in payroll counts, a very low unemployment rate and a nation-leading job vacancy rate. Average hourly wages have also risen near 5% as noted in Statistics Canada’s Labour Force Survey (LFS). A tighter labour market is expected lead to more upward momentum in average weekly earnings during the second half of the year.
On the jobs front, the number of people on payroll rose for the fourth time in five months to reach 2.28 million, up 0.2% from May and 3.7% year-over-year. This compares with a flat performance in the LFS. While the federal and provincial estimates of B.C. payroll numbers generally move in tandem, the recent deviation in estimated growth reflects methodological differences of the survey, the inclusion of agriculture and self-employed in LFS estimates and the effect of multiple-job holders.
The province’s small and medium-sized business confidence remained soft for a fourth straight month in August, and B.C. and Alberta were the only two provinces to record a month-to-month decline. The Canadian Federation of Independent Business’ (CFIB) Business Barometer reading of 55.9 points was the lowest since May 2009. In comparison, the CFIB’s Business Barometer ranking of national business optimism was 61.6 points on a scale of 0 to 100. This weak sentiment comes despite a time when the economy continues to track a solid pace of more than 2.5%. It is possible that weaker expectations reflect natural erosion after a stellar pace of growth in recent years, particularly given a slowdown in the housing market and related retail and business activity.•
Bryan Yu is deputy chief economist at Central 1 Credit Union.
