Paycheques in B.C. fattened in August as average weekly wage earnings rose 0.9% to $981, exceeding the national increase of 0.6%. This followed an increase of 0.8% in July. At 4.1%, year-over-year growth was the strongest among provinces.
Sectors contributing most to the gain from July were wholesale trade; information and culture industries, which includes part of the technology sector; professional, scientific and technical services; and real estate, rental and leasing.
Year-over-year earnings growth was led by a 9% increase in construction earnings, with growth near 10% for real estate, rental and leasing, and professional and scientific services. Broadly, momentum has risen across most sectors this year, picking up steam since May. An easing of average hours worked from a year ago point to rising wages. This aligns with tight labour market conditions observed in elevated job vacancy rates and low unemployment rates.
Payroll employment counts rose 0.2% from July with year-over-year growth at a robust 3.2%. Site C construction has been a contributor to strong utilities and construction growth, alongside robust gains in public administration, information and culture industries and health services. The combination of strong employment counts and wage earnings growth points to robust labour income gains.
Small-business confidence in B.C. gained traction October following a five-month lull. The Canadian Federation of Independent Business’ (CFIB) latest monthly Business Barometer reading jumped 5.6 points from September to 61.5 points on a scale of 0 to 100. A value above 50 means that more businesses surveyed expect strong conditions in the next year, compared with businesses expecting worse conditions.
Levels remain lower than normal for B.C., but the province bucked the general pattern of declines seen in most other provinces. Nationally, the Barometer came in at 60.5 points, which was down 0.9 points from September.
Several factors likely lifted confidence. These included the announcement of the United States-Mexico-Canada Agreement, and a green light for LNG Canada’s liquefied natural gas terminal in Kitimat, which is sure to fuel a boom in economic activity. There are also signs that the resale housing market is stabilizing.
Capacity constraints remain a concern, aligning with the province’s low unemployment rate and high job vacancy rate. According to the CFIB survey, 47% of respondents noted that business health was good, ranking third-highest in the country alongside Ontario. However, B.C.’s labour market is a constraint to growth, with 49% citing a shortage of skilled labour. This was the highest in the country, while 29% cited a shortage of unskilled or semi-skilled labour. Full-time staffing plans are easing, possibly the result of insufficient labour availability. •
Bryan Yu is deputy chief economist at Central 1 Credit Union.
