B.C. employees saw little change in their pay from November, with average weekly earnings essentially the same at $1,012.
Despite the lull, year-over-year growth accelerated to 3.7% from 3.3% the prior month and exceeded national growth of 3.4%.
While various factors drive earnings growth in any given month, including changes in hours worked, job composition, occupations and others, the trend is positive. Adjusting for monthly fluctuations, fourth-quarter earnings rose 3.5% from same-period 2018 with breadth among industries.
Weekly earnings growth was driven by services sectors (up 4.1%), with considerable growth in professional, technical and scientific services, in health care and social services and in arts, entertainment and recreation, which rose more than 6%. A strong technology sector, tight labour market and elevated tourism (until recently) have factored into the increase.
In contrast, resource extraction sectors and real estate rental and leasing have seen significant declines relative to same-period 2018. A weak commodity sector has weighed on earnings. A slowdown in hourly wage growth suggests firms are leaning on employees more intensively via increased hours.
Employer payroll filings pointed to a deceleration in hiring momentum at the end of the year. Employee counts fell 0.1% from November to 2.36 million persons. Year-over-year growth decelerated to 1.8%, which was the first sub-2% gain since August 2015. As with wage patterns, the drag has been predominantly on the resources sector, with forestry employment down 14% from a year ago, and mining 9.4% lower.
While positive economic news has been in short supply, B.C. will likely be able to hang its hat on strong capital investment growth. Investment intentions point to another record year of spending by firms. 2020 investment intentions in B.C. are strongest among provinces with a gain of 7.8% to $41.8 billion, compared with national growth of 2.8%. This follows a surge of 21% in 2019.
Capital construction growth is expected to drive B.C.’s increase with intentions of $30.1 billion (up 13%) as machinery and equipment declines 4%.
Among sectors, rising investment is predominantly driven by the transportation and warehousing sector, where intentions are up 16%, and which accounts for more than half of the net gains. This likely reflects investments in pipelines associated with the Coastal GasLink pipeline in northern B.C. Spending growth on utilities climbs 17%, driving most of the remaining growth. Elevated government capital spending is expected to lift spending on schools, while public administration investment climbs 7.1%. •
Bryan Yu is deputy chief economist at Central 1 Credit Union.
