B.C. records tiny jobs gain in December as employment falls in other provinces

Employment in B.C. edged up slightly in December. The gain of 3,800 is small but welcome considering job numbers fell in every other province. While there are many factors at play, B.C.’s more limited and targeted approach to restricting economic and social activity to help manage the ongoing pandemic appears to have tempered layoffs that have accompanied business closures and more widespread restrictions in other provinces.

With December’s handful of additional jobs, the total number of people working in B.C. is now down just 33,600 compared to February, a relatively modest 1.3% decline. When judged against developments in other provinces, B.C.’s February to December loss is small (see second figure), second only to Newfoundland & Labrador.

Additional positive labour market news includes the continued rotation towards full-time employment. The number of full-time workers in B.C. rose by 24,000 last month. This was offset by a 20,400 reduction in part-time employment. Much of the gain in full-time jobs likely reflects existing employees working more hours per week and shifting from part-time status to full-time status as business activity slowly strengthened in some sectors.

The December data also show core working age employment advancing slightly. Employment in this key age group has more than fully recovered since February. A solid increase of 5,000 jobs among older workers in December means employment in this cohort is down just 1.6% (9,100 jobs) from February. Most of the remaining labour market pain is concentrated among younger workers, where employment is still 9% lower than in February.

In general, B.C. has enjoyed an impressive employment recovery and appears relatively well-positioned to sustain a further healthy expansion in 2021. However, rising COVID-19 case numbers in Canada and the U.S. do cast a cloud over the economic outlook. In addition, there are a couple of dimensions of the local job market that are worth noting and will require close monitoring in the months ahead.

One is that public sector hiring – coupled with very few public sector job losses last spring -- has provided a substantial lift to the overall employment recovery process. Privatesector payroll employment dipped in December and remains 50,000 below where it stood in February, which amounts to a 3.1% decline. The number of workers classified as self-employed in B.C. is also 3.0% lower (13,600 jobs) than in early 2020. In contrast, employment in the aggregate public sector (capturing health care, education, and social services as well as public administration) has risen by more than 30,000 since February, a strong 6.5% gain.

The rise in the number of public sector employees is not surprising as governments have stepped-up spending and generally avoided layoffs during the pandemic. The need for additional health care resources is also helping boost public sector job numbers. But it is important to recognize that re-hiring furloughed employees and new job creation are not quite as robust in the private sector as the headline employment figures may suggest. In time, it will be necessary for private sector hiring and self employment to move to firmer footings in order to sustain the recovery process.

The varied recovery dynamics across industries are also of interest. The figure below shows industry employment in three groups: “limited impact,” “moderate impact,” and “hard hit” based on how they have fared during the pandemic. As shown, the number of jobs in “limited impact” industries continued to advance at a healthy pace in December. Employment in these industries collectively is up a robust 7.0% since February (roughly 60,000 jobs). On the other hand, the recovery process appears to have stalled in both the “moderately impacted” and “hard hit” industry groupings. This is something policymakers need to pay attention to.

Stronger growth in public sector employment is of course one reason for the steady rise in the “limited impact” sector, which captures health care and public administration jobs. But the upturn in industries that underpin much of B.C.’s export base – forestry, mining, oil and gas and manufacturing – is also part of the story. These industries are benefitting from the rebound in global trade since the early summer and the relative strength of economies in East Asia. The steep rise in demand for professional and technical services and the accompanying job creation are also contributing to B.C.’s employment revival.

For B.C.’s economic recovery to be sustained, overall private sector hiring has to pick up. Sectors that are lagging will also need to contribute more. Hopefully this will happen as we move through 2021 and more people are vaccinated both in B.C. and other jurisdictions around the world.