Employment up, real estate down

B.C. labour market conditions were little changed from February, with total employment increasing by 0.3% or 3,200 persons to just over 2.55 million persons (seasonally adjusted).

While statistically insignificant, the gain extended the strong upward trend observed over the past year. On a 12-month basis, employment growth sizzled at 3.2%, which was highest among provinces and above the national gain of 1.8%.

The Vancouver census metropolitan area drove the provincial gain with a 0.3% increase from February, while the year-over-year gain came in at 4%.

A caveat of the employment story has been a ramp-up in part-time work, which rose nearly 10% year-over-year, while full-time gains increased by a relatively modest 1.5%. This unequal split has contributed to relatively slow growth in total hours worked, suggesting top-line employment growth overstates economic growth. Meanwhile, average hourly earnings growth has eased to 0.5% year-over-year from more than 4% in the first half of 2018.

Nevertheless, B.C.’s unemployment rate of 4.7% remained the lowest in the country despite rising from 4.5% in February. Labour shortages remain rampant, which aligns with recent data on job vacancies. This could be a factor in explaining the sharper increase in part-time work as the strong labour market demand persuades some individuals to rejoin the workforce at reduced hours.

The “no good, very bad” year for the Lower Mainland housing market continued into March as the sales slump deepened and prices further declined. Total Multiple Listing Service (MLS) sales in the combined Metro Vancouver and Abbotsford-Mission area came in at just 2,909 units, which was down 29.5% from same-month 2018. This was the fewest March sales since 1998.

A swath of policy measures in recent years by the federal, provincial and municipal governments continues to curtail activity despite a robust labour market. Federal mortgage stress tests, the provincial speculation tax and expanded foreign-buyer tax and other measures have contributed to the pullback. More recent data on non-residential ownership has shown foreign purchasing to be more significant than previously estimated. Mortgage stress tests are severely affecting first-time buyers and curtailing move-up activity. •

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