B.C. employment surged in September, marking a fourth consecutive monthly increase, after a weak first half. Estimated employment rose by 33,300 persons, up 1.3% from August. Gains were propelled by both full-time and part-time work. Metro Vancouver employment growth exceeded growth in the rest of the province with a 2% increase.
Recent momentum better aligns with underlying economic momentum, as well as more robust growth observed in the payroll count measure of employment. Recent gains have pushed year-to-date employment close to our annual forecast of 1.2% for 2018. That said, given inherent volatility in the Labour Force Survey, a future pullback would not surprise.
Among industries driving growth, goods production was particularly strong with agriculture, manufacturing and construction leading the way. Service-sector employment growth was also robust with a 0.9% gain from August.
B.C.’s unemployment rate plunged to 4.2% from 5.3% in August, marking the lowest level since June 2008. Scant growth in the labour force contributed to this pullback. Nonetheless, low unemployment rates underscore B.C.’s status as the tightest labour market among provinces.
Further improvement is expected. LNG Canada’s decision to invest in a $40 billion natural gas liquefaction plant in Kitimat will spur construction jobs on both the plant and associated pipelines for workers residing across B.C., while also creating ancillary job opportunities. A tight labour market is a constraint, but we expect an increase in interprovincial and foreign workers.
Weak housing demand in the Lower Mainland continued through September. Multiple Listing Service sales fell 41%, year-over-year, to 2,611 units, marking the lowest same-month performance since 2012.
The combination of B-20 lending restrictions and high home values, rising interest rates and provincial policy measures have shunted buyers to the sidelines and given pause to those still able to purchase as prices erode.
At $915,026, the average price was flat compared with August and same-month 2017. However, levels are influenced by product and geographic sales composition, which can mask the trend. The constant-quality housing price index is down over the past three months, with the pace of decline accelerating. The broad benchmark fell 1.2% from August on an unadjusted basis, and 0.9% seasonally adjusted. Declines are being led by a steeper drop in the single-detached market, although a negative trend is evident for apartment and townhomes. Price indexes are down about 3% from the mid-2018 peak. •
Bryan Yu is deputy chief economist at Central 1 Credit Union.