Building permit values increased steadily over the past three years in the Central Okanagan. Photo credit: investkelowna.com
KELOWNA– The Central Okanagan economy entered early 2026 with continued momentum, supported by steady business activity and rising travel demand, even as broader national and global economic uncertainty, particularly around inflation, interest rates, and trade conditions, continues to shape the outlook. While labour market conditions show signs of adjustment as participation increases, overall economic activity across the region remains stable.
Labour Force, Employment and Job postings
The labour force strengthened in early 2026, with notable increases in participation and employment compared to the same period last year. The labour force population averaged 210,833 in Q1 2026, up slightly from 209,167 in Q1 2025 (+0.8%). While the underlying working-age population changed only modestly, the number of residents choosing to engage in the labour market rose sharply: the labour force increased from an average of 118,800 in Q1 2025 to 133,900 in Q1 2026 (+12.7%). This suggests a larger share of residents were either working or actively seeking work, consistent with the increase in the labour force participation rate from 56.8% in Q1 2025 to 63.5% in Q1 2026. Employment also increased year-over-year, rising from an average of 111,067 to 122,433 (+10.2%), indicating that more jobs were added over the period. However, the unemployment rate increased from an average of 6.4% to 8.5%, showing that the pace of labour force growth exceeded the pace of job creation. In practical terms, more people entered (or re-entered) the job market than the number of net positions available, which can raise unemployment even when employment is growing, particularly during periods when hiring does not accelerate at the same rate as participation.
Job postings declined year-over-year in the first quarter of 2026, reflecting softer labour demand at the same time as labour supply expanded. Total postings across occupation categories decreased from 6,034 in Q1 2025 to 5,155 in Q1 2026 (-14.6%). Sales and service occupations continued to account for the largest share of postings in Q1 2026 (1,737), followed by trades, transport and equipment operators (696) and business, finance and administration occupations (692), indicating that hiring demand remained concentrated in customer-facing roles. By industry, postings increased in several key sectors. For instance, retail trade rose from 394 in Q1 2025 to 434 in Q1 2026, and healthcare and social assistance increased from 451 to 538, suggesting pockets of resilience tied to essential services and local consumer activity. Despite these sector-specific gains, the overall decline in postings alongside a higher unemployment rate points to a more competitive job market: fewer advertised opportunities are being pursued by a larger pool of job seekers. This dynamic can be especially challenging for youth and new labour market entrants, who often rely more heavily on entry-level postings and tend to face greater competition when overall hiring slows and unemployment rises.
Business Counts
Business counts, published annually by Statistics Canada, continued to expand in 2025, with the total number of businesses increasing by 4.0% year-over-year, rising to 37,359 from 35,913 in 2024. The business landscape remains largely dominated by self-employed and non‑employing establishments, with businesses without employees accounting for 73.5% of all firms, while those with employees comprised 26.5%. By industry, real estate and rental and leasing continued to lead the region with 8,595 businesses, reflecting the sector’s ongoing prominence. Construction followed with 4,357 businesses, supported by sustained development activity, while professional, scientific and technical services ranked third with 3,828 businesses, underscoring continued strength in knowledge‑based industries.
Airport passengers
Passenger volumes at Kelowna International Airport continued to trend upward in early 2026, reflecting sustained travel demand and regional economic activity. Total passengers increased from 592,085 in Q1 2025 to 636,815 in Q1 2026, representing a year-over-year increase of approximately 7.6%. This upward trend aligns with continued investment in airport infrastructure, including the terminal expansion project, which is intended to enhance passenger experience, increase capacity, and support long-term growth in tourism and business travel.
Building permits
Building permit values increased steadily over the past three years, rising from $197,993,680 in Q1 2024 to $206,854,628 in Q1 2025 (+4.5%), followed by a sharper increase to $258,698,012 in Q1 2026 (+25.1%). This places permit values 30.7% higher than Q1 2024, indicating stronger investment activity, likely driven by higher-value construction projects rather than overall volume growth.
Housing stats
Housing activity showed mixed trends in Q1 2026. Average housing starts totalled 435 units, down from an average of 458 units in Q1 2025, representing a 5.0% year-over-year decrease and indicating a modest slowdown in new residential construction activity. In contrast, the average median housing price increased year over year, rising to $1,610,833 in Q1 2026 from $1,561,667 in Q1 2025, an increase of approximately 3.1%. The decline in housing starts may reflect ongoing construction cost pressures and higher interest rates, while continued price growth suggests that limited housing supply and persistent demand continue to place upward pressure on home prices despite affordability challenges.
Conclusion
Overall, early 2026 indicators show a Central Okanagan economy with continued momentum and underlying strength, even as external economic headwinds at the national and global level continue to influence business confidence and investment decisions. Growth in labour force participation, business counts, and passenger travel reflects strong regional engagement and confidence, while employment gains and resilience in key sectors support a positive outlook for continued economic activity. At the same time, the decline in job postings and rise in unemployment highlight emerging challenges in labour demand, suggesting a need to monitor hiring conditions closely as the labour market adjusts to a larger and more active workforce.
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Source: investkelowna.com
