Rising job vacancies and weak hiring point to a cooling economy despite wage growth
Rising job vacancies and weak hiring point to a cooling economy despite wage growth
B.C. employment counts fell in November, pointing to weaker late-year economic conditions as strike action from postal workers reduced the headline count. According to the latest Survey of Employers, Payroll and Hours, total payroll counts in the province fell sharply by 15,010 positions (0.6 per cent) adding to modest declines seen in the prior two months. Both goods-producing industries and services-producing industries reported a 0.5-per cent-reduction (down by 1,924 positions and 9,932 positions, respectively).
The job vacancy rate rose to 3.6 per cent in November, with total vacancies jumping to 91,065 positions, reversing the decrease registered in October. The job vacancy rate has remained low since the second half of 2023, highlighting a moderation in hiring by businesses.
Within goods-producing industries, the manufacturing and construction sectors contributed to the overall decline, and mining, quarrying, and oil and gas extraction also recorded fewer positions, following an increase in October. The most-notable decline in payroll counts in across services was due to the strike-impacted transportation and warehousing sector, which shed more than 5,100 positions (down four per cent), following flat performance since March. Other services-producing industries saw modest decreases in payroll counts during the same month while some of the decline was offset by a gain in employment in health care and social assistance (up 0.2 per cent). The decline would have been more modest if we excluded the impact of Canada Post job action, but trend would still be weak. Going forward, trends will likely remain tempered as low interest rates boost investment, but trade sector risks detract from growth.
On the wage front, seasonally adjusted average weekly earnings in B.C. went up 0.1 per cent to $1,290.38 in November. On a year-over-year basis, November’s average weekly earnings in B.C. were 4.5 per cent higher.
The Canadian Federation of Independent Business (CFIB) Monthly Business Barometer survey highlighted mixed results from small and medium-sized enterprises (SMEs) throughout Canada in January amid widespread uncertainty about a potential Canada-U.S. trade war, which has now been put off until March (maybe). The long-term 12-month confidence index fell for the second consecutive month, down by 1.8 points to 54.6 points. On the other hand, the short-term index rose by 2.7 points to 49.2 points. In particular, exporting small businesses reported an 8.1-point drop in long-term confidence levels while importers saw a 3.3-point dip. The manufacturing sector, which would be one of the industries most exposed to U.S. tariffs, saw confidence weaken in both time horizons.
Among provinces, the long- and short-term indices declined the most in B.C., with a drop of 4.5 points and 3.2 points, respectively. Twenty-five per cent of B.C. SMEs considered themselves to be in a good state of business health, slightly up from 24 per cent in December. Staffing plans were relatively unchanged. Insufficient demand and shortages of skilled labour were top constraints to sales or production growth for businesses in the province. Limited working capital and physical space also hampered sales growth. Taxes and regulatory costs, insurance and wages were the top input cost constraints. Fuel, and occupancy and borrowing costs, were also on this list.
Bryan Yu is chief economist at Central 1.
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