The latest payroll employment data from Statistics Canada pointed to a mixed performance in B.C.’s labour market in May.
Average weekly earnings in the province marched ahead with a 0.9% gain from April to $999.85, with increases slightly stronger in the goods--producing sectors. While trailing national growth of 1.1%, this was the third straight monthly gain. Year-over-year growth came in at a robust 4.3%. The latter exceeded the national increase of 3.4%.
While various factors contribute to growth, hourly wages have accelerated with a year-over-year gain of more than 4% in recent months. Similarly, the fixed-weight index of average hourly earnings, which adjusts for employment composition, was up 2.4% year-over-year in May, pointing to rising wage pressures. A low unemployment rate and high job vacancy rates are lifting wages.
At the same time, B.C. payroll employment counts in May were virtually unchanged from April at 2.33 million persons but remained solidly ahead of year-ago figures by 2.4%. Growth in payroll counts slipped over the past two months, suggesting a moderation in hiring momentum, which could reflect a combination of decelerating economic growth and skills shortages in some sectors. Employment in goods-producing sectors was up 3.3% from a year ago but has been flat since late 2018, with sectors like lumber production likely dragging on growth. Services employment rose 2.5% year-over-year, albeit with a decelerating trend.
International tourist visits to B.C. surged in May and are trending at record highs. Total tourist entries through B.C. rose 4.5% from April to 540,460 persons, marking a more than 5% gain from a year ago. May’s monthly increase was led by a surge in U.S. visitors, while overseas visits held on to the gains observed in April. With recent gains, U.S. visits are trending above previous highs in the early 2000s, and overseas visits are at a record high. A competitive Canadian dollar, stable political environment and possible interest to relocate to Canada may be factoring into the strong performance.
Through the first five months of 2019, year-to-date entries are up 4.8%, with a 5.5% increase in U.S. tourists and 3.6% increase from overseas. While a pullback is expected, tourist counts are expected to exceed last year’s record number by about 2% to 6.14 million persons. •
Bryan Yu is deputy chief economist at Central 1 Credit Union.