B.C. employers added to payrolls for a 16th straight month in September as hiring remained brisk despite expectations of a slowing economy.
From the latest Survey of Employment, Payroll and Hours (SEPH), growth in payroll counts matched August with a 0.4 per cent monthly gain representing 10,450 net new positions. In comparison, estimates from the Labour Force Survey (LFS) of households pointed to a 1.2 per cent increase during the month. Ongoing hiring reflects an environment of persistent labour shortages and firms looking to fill positions. In B.C., the job vacancy rate came in at 6.5 per cent, which was the highest among provinces and represented 160,000 unfilled positions.
With the latest gain, payroll counts are 5.7 per cent higher than February 2020, which is more robust than LFS employment growth of 4.1 per cent over the period. Various factors can create divergence between the surveys, including timing of job losses, as SEPH reflects payouts of salaries and/or benefits in a given month in contrast with whether an individual worked. It also excludes farm work and self-employed workers.
Health care and social assistance proved to be a strong contributor to growth with a surge of 5,205 positions or three per cent during the month. Adding to this was a strong gain of 1.5 per cent or 2,704 positions in the construction sector. Gains were broadly positive across nearly all sectors.
Average weekly earnings rose another 0.4 per cent to $1,176, but year-over-year growth came in at a moderate 3.2 per cent. The fixed hourly earnings index decelerated to 2.6 per cent, which was surprisingly low given the high job vacancy rate. In comparison, the LFS average hourly wage rose 5.7 per cent year over year. In all accounts, wage growth is lagging behind inflationary pressure. This suggests that there is no wage spiral at this point, and it is possible that wage pressure may already be abating as the economy slows.
Tourist visits to B.C. were surprisingly soft in September after climbing for seven straight months. The seasonally adjusted number of non-resident visitors entering Canada through B.C. slumped 14.8 per cent from the previous month, reflecting a surge in summer months. Same day excursions fell the most, down by 17 per cent, while overnight visits did not fare much better as they fell by 12.8 per cent.
U.S. visitors, which make up the bulk of those entering B.C., fell by 15 per cent. Air travel and other modes of transportation fell the most, down 15.1 per cent and 26.5 per cent, respectively. Travel by land also fell, but only by 3.6 per cent. Visits by residents from other countries were also down 14 per cent, with air travel down 24.1 per cent. The lone bright spot was an increase in the number visitors entering by land or sea from other countries, jumping 80.8 per cent over the previous month.
Compared with the same period in 2019, the number of tourists entering B.C. is still down 30.5 per cent. The major drag is overnight visits, which are down 45 per cent. Same day excursions, however, have recovered. The number of those entering B.C. in September 2022 was up 15.5 per cent over the same month in 2019.
Overall, tourism numbers should improve with the loosening of restrictions. As of Oct. 1, proof of vaccination, COVID testing, quarantining and the use of the ArriveCan app is no longer required, along with health checks and wearing mask on planes and trains. That said, the expected slowdown in the economy and reduced demand could offset any gains from relaxed restrictions. •
Bryan Yu is chief economist at Central 1 Credit Union.
