BC Business Matters:
Ken Peacock >>
Buoyant Job Market in Metro Vancouver
Last year the number of people working in Metro Vancouver climbed 3.1%, which represents a net increase of almost 42,000 jobs. During the previous year, 2016, job creation the region was even stronger at 4.7%, meaning another 60,000 positions. So, over the past two years, employment growth in Metro Vancouver averaged 3.9%, with the number of people employed in the area jumping by more than 100,000. In short, the region’s job market has been firing on all cylinders.
Job growth in Metro Vancouver was among the strongest of all metro regions in the country last year. Employment in Montreal grew 3.6%, the fastest pace among the country’s larger CMAs. Calgary also benefited from improved labour market conditions, with the number of people rising 3.3%. In both these cases, however, the regional labour market was much weaker in 2016. In Calgary, employment fell 1.5% in 2016, so 2017’s solid gain partly reflects a rebound from a lower base. In comparison, job growth in Metro Vancouver has been brisk for two straight years.
Some smaller metro areas across the country also saw strong job growth last year. In Hamilton, employment soared by more than 8%. Barrie reported a gain of nearly 11%. Within our own province, employment growth was stronger in both Victoria and Kelowna than it was in Metro Vancouver last year – in Kelowna’s case, employment was up by a whopping 10%.
More than two years of robust job growth pushed Metro Vancouver’s unemployment rate down to 4.1% by the end of last year. While not an all time low, historically it is unusual for the unemployment rate to be near 4%. At this rate, the pool of available workers is smaller and many employers will have considerable difficulty filling some positions.
While job growth in Metro Vancouver has been reasonably diversified, a few sectors stand out as making oversized contributions. In 2017, more than 14,000 jobs were created in the Finance, Real Estate and Leasing industry. This aggregated industry contains several sub-industries, but it is clear from provincial level data that the real estate segment is the dominant source of job creation in the overall finance sector.
The next largest contribution was from construction, which added nearly 12,000 jobs in Metro Vancouver last year (an increase of 8%). Both the residential and non-residential segments of the construction sector made similar-sized contributions to the overall gain in employment.
Another 6,000 jobs were created in the Information and Culture industry. Here about half of the new positions can be traced to the film and television sector, while most of the remaining increase is attributable to the Amusement, Gambling and Entertainment component of the broader industry classification.
Collectively, the three sectors registering the largest numbers of new jobs accounted for roughly 70% of all net employment growth in Metro Vancouver in 2017. So, although the region continues to benefit from a diversified economy and has enjoyed employment gains in most sectors, residential real estate (transactions, financing, and construction) looms large as an engine of job growth. Considering that real estate activity may moderate in the face of higher interest rates and policy measures aimed at dampening demand, job growth in the Vancouver region will probably return to a more sustainable pace of around 2%.