A tepid labour market is on B.C.’s horizon as slow growth conditions remain in the province for the next couple of years.
So far in 2013, employers have been reluctant to hire, adapting to what little growth there is by shifting part-time workers to full-time. The result has been nearly zero net gains in employment and the weakest performance since 2001 other than the recessionary contraction in 2009.
Central 1 Credit Union’s outlook for 2014-15 is for an improved job market with annual job growth of about 1.6% for both years and growth accelerating above 2.5% in 2016-17.
Led by major projects getting underway and the uptrend in housing starts expected over the forecast horizon, the construction sector is expected to have higher than average job growth.
Resource sector employment is also projected to rise beginning in 2015 as commodity markets rebound and exploration and extraction activities increase.
However, government belt-tightening will continue to limit growth in public-sector employment. Education-related and direct government job growth is expected to average 0.5% between 2013 and 2017. But health and social services will buck the trend with average annual growth of about 2% reflecting the needs associated with an aging population.
Tempered growth in the economy and the labour market will keep a lid on upward wage pressure through 2015. Hourly labour income is forecast to expand about 2% in 2014-15 before moving to about 3% in the remainder of the forecast period to 2017.
Population growth will stay below 1% through to 2015, marking the slowest growth phase since the early 2000s. Net migration is expected to decline sharply this year as more aggressive interprovincial out-migration offsets the steady inflow of international migrants to B.C. So far, relatively faster economic growth in Alberta and Saskatchewan has contributed to weaker labour force growth in B.C. by attracting workers from Canada’s Asia Pacific gateway.
Sluggish population growth should also limit the number of new people entering the workforce, which alongside employment gains, will help to lower the unemployment rate to near 6% by 2015 and 5% by 2017. •
Bryan Yu is an economist at Central 1 Credit Union
