KEN PEACOCK
Economic Perspectives from BCBC website
BRITISH COLUMBIA – The August release of the Labour Force Survey delivered more bad news about the state of B.C.’s labour market. The total number of people working in the province fell by 10,300 from June, which translates into a sizable monthly 0.4 per cent decline. We never read too much into a single month of labour market data, but July’s decrease follows a loss of 9,700 in June and a drop of 7,900 in May. Three consecutive monthly declines in overall employment levels are more concerning.
Much more worrisome, however, is the fact that the July report extends and deepens a long-standing pattern of very weak private sector job creation coupled with surging public sector payrolls. July’s Survey results were especially striking as the number of private sector employees dropped 18,000 (an outsized 1 per cent monthly decline) and public sector payrolls surged 15,000 (an eye-popping 2.5 per cent monthly increase). A decline of 7,400 in the number of self-employed persons pulled overall employment levels down 10,300 in the month.
July’s report means the tiny blip in private sector hiring in the April-June period of this year has disappeared and the number of private sector employees in the province is up just 5,300 since July 2022, an infinitesimal increase of 0.3 per cent over a two-year period.
With July’s jump the number of public sector employees in the province now sits 63,800 higher than two years earlier, which is a massive 11.8 per cent increase.
Somewhat unbelievably and much more concerning is the fact that the public sector / private sector hiring divergence has been evident for five years now. Since early 2019, B.C. has seen almost no net increase in the number of private sector jobs and a huge 33 per cent increase in public sector employment.
In an earlier mid-year update on the B.C. labour market titled The lack of private sector job creation in B.C. should be setting off alarm bells, we examined hiring trends back to 2019 and contrasted B.C.’s job market to the other provinces. It shows that B.C. is unique among provinces in registering essentially no private sector job creation for a half-decade period.
Our mid-year assessment indicated the protracted weakness in private sector hiring should be sounding alarm bells in Victoria. July’s report indicates these alarms should be ringing even louder. It reaffirms mounting evidence that rising operating costs, an ever-increasing regulatory burden, very significant challenges in B.C.’s forestry sector, and heightened uncertainty around operating on B.C.’s land base are all weighing on capital investment and job creation in the private sector. The difference between B.C.’s job market and all other provinces is too striking to ignore.
Stagnant private sector job creation means greatly diminished job opportunities for younger people, weaker wage growth and compounds the cost-of-living crisis in the province. July’s Labour Force Survey reinforces our expectation that the net outflow of interprovincial migration from B.C. to Alberta will accelerate in the year ahead where job prospects are much more plentiful.
Ken Peakcock is Senior Vice President & Chief Economist for BCBC
Business Council of British Columbia is a non-partisan organization dedicated to promoting prosperity for current and future generations, comprised of over 200 leading B.C. companies, post-secondary institutions and industry associations.
