B.C.’s economic recovery progressed in July following a pandemic-driven collapse during the spring as the economic restart lifted rehiring.
Provincial employment rebounded another 3% (or 70,200 persons) in July to reach 2.374 million persons. This was led by a 3.8% gain in the Vancouver metropolitan area. In comparison, national employment rose by 2.4% or 418,500 persons from June. The provincial unemployment rate improved from 13% in June to 11.1% in July but remained high.
B.C. has recouped more than half the near 400,000-person employment drop from February through April, but remained down 6.5% or 164,900 persons. Vancouver’s performance has lagged behind with levels down 10%.
The details, however, were far from rosy. Part-time work drove July’s gain with a 9.9% increase and has almost recovered to February levels. However, lagging full-time growth (up 1.2% in July and 8% below February) speaks to elevated underemployment and sector-specific gains. Hiring in accommodations/foodservices accounted for more than a third of the net gain as restaurants ramped up and hotels re-opened. Information and culture industries, other private services, and retail/wholesale trade, and manufacturing were also key drivers.
Hard-hit sectors also remain well short of February levels. Employment in accommodations/foodservices was still down 11%, private services were down 18% and information/culture was 16% lower. Construction was 12% lower. A couple of bright spots included growth in utilities and professional/scientific/technical services.
The pace of recovery will likely slow. Recent gains are low-hanging fruit of the initial restart, and in part supported by federal measures like the Canada Emergency Wage Subsidy. Given rapid growth in part-time work, employers may move to increase average hours than bring more employees on board. The economy will only gradually move toward full recovery given th¡e impacts of physical distancing on operations, border closures and a weak global economic backdrop affecting headcounts.
B.C. exports continued to erode amid a weaker global growth environment, with exports down 3.5% (seasonally adjusted) in contrast to a national gain of 17% in June. While this may seem like a calamity, pandemic-induced declines in B.C. were nowhere near as deep as those of some other provinces. •
Bryan Yu is deputy chief economist at Central 1 Credit Union.
