January’s Labour Force Survey showed another tiny employment gain in B.C. This marks the second consecutive month of very skinny month-to-month job gains, suggesting the province’s vigorous employment rebound has lost steam. This is even more true for Canada as a whole, as employment dropped sharply in January.
The initial resurgence in B.C. employment that followed the re-opening of the economy in May 2020 has clearly waned. Unpacking differences across industry sectors suggests job gains over the first half of 2021 will be muted at best. While a stalling in the recovery process is concerning, B.C. has avoided the sizable job losses experienced in Ontario and Quebec, where sweeping lockdowns have been imposed.
The number of people working in B.C. currently sits 42,000 below last February, a 1.6% shortfall. Even though a handful of jobs were added last month, the unemployment rate moved up to 8% in January. There were no notable changes in the full-time and part-time categories. Full time employment still has a longer way to go to return to pre-pandemic levels.
New jobs are being created in some sectors of the economy while the hiring/re-hiring process is stalled in others. Tourism-dependent industries and other high contact service industries will see few job gains until travel is re-opened. But re-hiring has also moderated in some other relatively hard-hit service industries such as finance, insurance and real estate, transportation, and other personal services. Until vaccines are available and distributed re-hiring and recovery in these industries will remain weak.
Overall, we expect total employment to make only very modest progress in the first half of the year. It is difficult to expect otherwise considering the number of people working in the industries below the line in the chart directly above is still down 127,000 from February 2020. Many of these jobs will be slow to return and a significant number may not come back at all. The industries that have flatlined also account for a majority of employment (about 63%) in the province.
On the other hand, in the industries comprising the two series above the line employment is up 85,000. And new jobs continue to be created in these sectors. But here too the pace of job creation has eased.
To summarize, as expected the employment recovery is off to a very slow start in 2021 and this is not expected to change much in the first half of the year.
Still B.C. is in better shape than several other provinces. Nationally, employment remains 4.5% lower than in February 2020. In Ontario employment is down 5.4% and Alberta it is 3.9% lower.