Hiring increases in B.C. while earnings weaken

Statistics Canada’s Survey of Employment, Payrolls and Hours pointed to further gains in hiring but a softening in weekly earnings in February.

Non-farm payroll counts rose 0.3% from January and 3% (79,000 persons) from a year ago, confirming the solid employment growth momentum in the sister Labour Force Survey. B.C.’s year-over-year gains were third highest in the country behind Prince Edward Island and New Brunswick. Strong gains have been observed in construction (up 6.4%), transportation and warehousing (up 5.4%) and arts, entertainment and recreation (up 10.7%).

In contrast, B.C. weekly earnings edged lower for a fourth consecutive month in February despite the tight labour market. Average weekly earnings fell 0.6% from January to $969.20 in February, with year-over-year growth at a mild 1.1%.

Wages in the resources, utilities and manufacturing sectors increased. Meanwhile services-producing sector earnings fell another 0.6% to $918. Retail and wholesale trade (down 1.6%), management of companies (down 2.7%) and arts, entertainment and recreation (down 5.6%) were the main drags while transportation and warehousing (up 2.5%) and finance and insurance (up 5.7%) were key gains.

Although the recent trend is worrisome, caution is warranted given the influence of various factors, including hours worked (overtime), seniority and industry composition. An increase in part-time employment growth has been a factor, as has higher employment in some lower-paying sectors. Average hours worked for hourly employees were 2% lower than a year ago at 28.1 hours and trending lower. Companies, constrained by a labour shortage, may be filling in the gaps with more part-time workers, contributing to the weakness in headline weekly earnings. Average earnings remained firm at 2.6% year-over-year for hourly workers, but growth has decelerated in recent months.

International tourist visits to B.C. fell sharply in February as severe snowfall hampered travel from the U.S. and timing of the Lunar New Year pushed more overseas visits into January. Total overnight visitors fell to a seasonally adjusted 472,628 persons in February, marking an 8.4% decline from January and a 5% year-over-year decline. This marked the fewest monthly tourist visits since September 2017. Visits from the U.S. declined 10.5% to 296,723 persons, with overseas tourist inflows down 4.9% from January to 175,865. The latter was driven by a drop in travel from Asia, particularly China, following a January pickup.

February’s downshift should be seen as a one-off. A low Canadian dollar remains supportive for international tourism demand. •

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