B.C. weekly earnings, business confidence up

According to Statistics Canada’s Survey of Employment, Payrolls and Hours (SEPH), average weekly earnings fell 0.4% in November to $1,011 to negate October gains.

Despite this, year-over-year growth in B.C. was a solid 3.2%, which was slightly higher than the countrywide increase of 3.1% and third strongest among provinces, behind Quebec and Nova Scotia.

Lower weekly earnings reflected the combination of a second straight decline of earnings in goods-producing sectors (down 1%) and a 0.4% decline in the larger services-producing sectors.

While monthly data can be volatile owing to hours worked and full-time/part-time split, resource extraction sectors of forestry and logging (down 11% year-over-year) and mining have clearly deteriorated, although the latter popped higher in November.

In contrast, earnings in sectors such as professional, scientific and technical services, which includes a chunk of the high-flying technology sector, have surged 9.5% year-over-year, alongside strong gains in health care and tourism-related sectors. Employment continued to rise in most sectors but was tempered by a downturn in resource employment. 

SEPH employment has outperformed the more widely watched Labour Force Survey (LFS), which has declined since May but rose a mild 0.5% year-over-year in November. Divergence is not uncommon. While employment indicators move in tandem over longer periods, they can diverge in the medium term. We tend to put more weight on SEPH values given that it is based on administrative data rather than a household survey. That said, the LFS is timelier and includes data on farm and self-employed workers, which is excluded from SEPH.

Small-business confidence in B.C. rose for a second straight month in January, according to the Canadian Federation of Independent Business. While rebounding from a fall bottom, the group’s Business Barometer Index (BBI) remained weak and points to downbeat expectations for the year ahead.

Short-term full-time hiring plans in B.C. were negative, with 12% of respondents looking to increase staff and 17% planning to cut. This is abnormal for B.C. From 2012 through October 2019 expansionary hiring plans comfortably outpaced cuts. This suggests some downward pressure on B.C.’s hiring in 2020.•

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