Wage growth in B.C. remained solid in June despite losing some momentum following a strong gain the prior month.
Weekly earnings averaged $996.30, down 0.5% from the previous month but up 3.2% from a year ago. Average hourly wages were up by a near-identical pace, meaning growth was driven by compensation gains rather than an increase in hours worked over the past year. This was confirmed by a 3% gain in a fixed-weighted index of hourly earnings. Gains have picked up in the last three months and are running ahead of inflation, reflecting tight labour market conditions.
Growth was broad across sectors, with year-over-year gains led by services-producing sectors, which increased 3.1%. Sector highlights included transportation and warehousing (up 5.1%), trade (up 4.3%), professional, scientific and technical services (up 5.5%) and accommodations and food-services (up 5.2%). Goods-producing sectors were up a modest 2.8%, with gains in construction (up 4.2%) and manufacturing (up 3.4%). The struggling forestry and related sectors were a drag, with weekly earnings down 5.7% and utilities down 9.4%.
Non-farm payroll counts in B.C. edged higher by 0.1% to 2.33 million persons. Year-over-year, payroll counts rose by a solid 2.3%. The latter increase was third-highest among provinces and was led by gains in professional and technical services (up 5.0%), art, entertainment and recreation (up 6.6%), health care and social services (up 5.6%) and public administration (up 5.2%). Growth was solid across most sectors, albeit with drag from forestry, information and cultural industries and accommodation and food services.
Confidence among B.C.’s small and medium-sized businesses improved but remained shallow in August. The latest Canadian Federation of Independent Business monthly Business Barometer came in at a disappointing 55.3 points. While up two points from July, and above recent months’ readings, this is below the long-term average of 60 to 65 points typically indicative of stronger economic conditions. Fewer small businesses are expecting strengthening conditions over the next year. B.C.’s index level was among the lowest in Canada and was ahead of only Alberta and Newfoundland and Labrador. An index value above 50 points means the number of firms expecting stronger conditions over the coming year outnumber those expecting weaker conditions.
Ongoing sluggishness in B.C.’s confidence reading comes despite what is expected to be modest growth in the economy this year of about 2.2%. •
Bryan Yu is deputy chief economist at Central 1 Credit Union.