B.C. growth resumes after mid-summer stumble

B.C.’s economy posted a solid month of job growth in August after a July stall, which points to resumption of economic momentum.

Total employment rose by 14,400 persons (0.5%) to reach 2.638 million persons. This was consistent with the national increase, but lagged behind growth in a handful of other provinces, including Ontario and Alberta. That said, B.C. has recorded the strongest recovery in jobs relative to pre-pandemic trends and is the only province where employment exceeds pre-pandemic levels. The unemployment rate fell to 6.2% from 6.6%.

Metro Vancouver employment rose 0.9% to drive provincial gains, while the unemployment rate fell to 6.7% from 7.3%.

August performance was broadly solid. Full-time employment growth of 0.8% accounted for all of the gain (up 16,900 persons), while part-time employment fell. However, full-time work is still slightly below pre-pandemic levels, while the latter has accounted for all of the net increase. Private-sector hiring surged by 1.7% and self-employment rebounded modestly; offsetting public-sector losses and pointing to more economic vibrancy. Self-employed workers continue to struggle during the pandemic or have transitioned into organizations.

Among industries, manufacturing employment jumped by 16,600 persons (14.7%), which alongside an increase in construction (7,900 jobs) drove hiring in goods-producing sectors. In contrast, services-sector employment slipped 0.5% or 10,000 persons. Despite solid gains in accommodations/foodservices (up 4.0%) and information/culture (4.7%) and a lift from public administration, which could reflect an election bump, a number of sectors shed workers. Fears of the Delta variant wave may have slowed the return to offices, contributing to a drop in building support positions, while a slowing housing market likely cut finance and real estate positions. Interestingly, education employment also fell, although this may reflect some abnormal seasonal influences due to the pandemic.

The economy is expected to generate further job growth through the end of the year as normalizing conditions drive services growth and positive sentiment for 2022 lifts investment and hiring. At the same time, the Delta variant will likely slow some momentum. 

B.C. building permit volume bounced back in July following four months of contractions. Dollar-volume permits rose 18.3% in July to $1.57 billion.•

Bryan Yu is chief economist at Central 1 Credit Union.