B.C.’s economy outperformed other provinces in October despite what has been a worrisome trajectory of COVID-19 cases, and new daily records heading into November.
National employment growth came in at 0.5%, slowing from a month-to-month increase of 2.1% in September. In B.C., October employment rose 1.4% or 33,500 persons, which was second only to growth in Newfoundland and Labrador (up 2.7%). Six months of consecutive gains have narrowed the gap from February to 2.4% or 61,300 employed persons compared with a 3.3% gap nationally. Metro Vancouver contributed to the entirety of B.C.’s October net gain, with employment up 3.8% or 52,200 persons.
Whilst targeted efforts to stem the spread of rising COVID-19 cases in areas of Ontario and Quebec led to slowing of the employment recovery, B.C. restrictions were mild up until early November.
B.C.’s unemployment rate declined faster than expected, with October’s estimate at 8% compared with 8.4% in September. Metro Vancouver’s rate plunged from 9.1% to 7.7%.
October employment gains were widespread among industries, reflecting demand for health-care workers, improvement in forestry, stronger housing markets and public-sector hiring. Health and social assistance and information and culture industries drove about a third of the increase. Manufacturing employment rose 3.5%, and resource employment increased 10%. Some harder hit sectors accommodations/foodservices and other private services underperformed.
That said, weak conditions persist. The latest gains owed to a surge in part-time work (up 4.6%) as full-time employment edged up. Full-time employment was still 5% lower than February, while part-time employment rose 7%, reflecting an economy operating below capacity.
Future growth momentum will wane. Rising cases have triggered stricter health measures in November, which will curtail hiring. Moreover, with employment in nine of 16 industry sectors fully recovered to pre-pandemic levels, there is less room for improvement. Travel and hospitality sectors are still well below February levels and retrenchment of domestic tourism and rising COVID-19 cases in the winter will limit the recovery.
Housing market activity was robust in October amid high sales and surging prices in Abbotsford-Mission/Metro Vancouver. Sales reached 6,017 units, up 37% year-over-year. While down from September’s 60% gain, this was the strongest October on record. Seasonally adjusted sales were broadly unchanged from September levels but above pre-pandemic February levels by 68%.
While the pandemic economy is still characterized by high unemployment and uncertainty, demand has been on a tear amid sharp declines in mortgage rates, elevated savings and steady incomes for higher earning individuals. Preferences have also shifted amid remote work, driving demand for space and suburban markets, and eschewing the confines of apartment condos. Demand for the latter has also been hurt by low immigration and declines in the number of international students. This is evident in sales, with detached and townhome sales up 50% on a year-over-year basis, while apartments rose 15%.
Through the first 10 months, sales were up 20%, marking the strongest same-period performance since 2017.
Resale inventory of detached units and townhomes are declining while apartment inventory has risen as more units are added to the market both from move-up buyers and investors. This has led to strong seller’s-market conditions in the townhome and detached sectors. The average regional price was steady from September and up 12.3% year-over-year to $1.01 million. Even adjusting for sales composition and housing attributes, the quality-adjusted home-prices index was up 0.4% from September and 6% year-over-year, led by strong detached home price growth.
Bryan Yu is deputy chief economist at Central 1 Credit Union.
