B.C.’s September rebound is stronger than expected

B.C.’s labour market performance was surprisingly strong in September, with employment up 2.3% or 54,800 persons.

This followed a 0.6% gain in August and outpaced the national increase of 2.1%. With the latest gain, the gap from pre-pandemic February employment narrowed to 3.7% or fewer than 100,000 persons. At the height of pandemic-induced economic restrictions, nearly 400,000 jobs were lost. The unemployment rate fell sharply by 2.3 percentage points from 10.7% to 8.4%.

Provincially, both full-time (up 2.3%) and part-time (up 3%) employment rose. That said, many individuals are underemployed and working fewer hours than otherwise would be the case. Full-time employment is still 5.3% below February levels as part-time employment has moved up by 2%. Total hours worked are still down 10% from February.

Provincial industry performance was uneven, moderating some of the optimism. September’s gain was driven by services-sector hiring, which jumped 3.3%.  

Despite the better-than-
expected rebound, a slower phase of hiring is expected if not an outright stall. Hospitality sectors face an uncertain fall as the weather turns, and a lack of events and conferences will further impact this sector. Rising COVID-19 caseloads could also scale back return to work and a broader economic recovery.

Robust demand for Lower Mainland housing continued through September. Multiple Listing Service sales reached 5,847 units in September, marking a gain of 60.3% from same month 2019. Seasonally adjusted sales rose about 5% month-to-month following larger gains the prior two months.

Despite high unemployment, the combination of low mortgage rates, steady employment for higher-income earners and changing homeownership preferences has propelled demand.

Through September, regional sales rose 18% over the same period in 2019.

Market conditions are entrenched in a seller’s market, with conditions particularly tight for townhomes and detached units. Price levels continued to march higher with the average value at $1 million during the month and up 14% year-over-year. Values have risen quickly in recent months, albeit in part due to a shifting composition of sales. That said, the constant-quality benchmark price rose 0.4% with a year-over-year change of 5.8%. •

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