B.C.’s labour market remained on the upswing in November as employment surged by 15,900 persons or 0.6% from October to 2.53 million. This compared favourably with a 0.5% increase for the country. However, the increase came from a spike in part-time employment as full-time employment fell.
November’s employment gain added to the positive hiring trend observed since July following 2018’s dismal first half. Year-over-year employment growth reached 1.7% in November. Insufficient labour supply was a likely factor constraining hiring momentum early in the year – observed in high job vacancy rates and a low unemployment rate.
Despite modest employment growth, the labour market remains tight. The unemployment rate rose to 4.4% from 4.1% in October but remains near historical lows and is lower than all other provinces by more than a percentage point. Oddly enough, average wage growth rapidly deteriorated following a mid-year year-over-year pace of 6%. Levels declined 1% in November and lagged behind the rest of the country.
Annual employment growth is forecast to reach 1%, down from 3.7% in 2017. The unemployment rate averages 4.7%. Employment growth is forecast to edge higher in 2019 despite a slowdown in housing-related activity and consumer spending. Weak home sales continued through November. Multiple Listing Service (MLS) sales in the combined Metro Vancouver and Abbotsford-Mission region were down 41.6% year-over-year, to 2,610 units. While tear-inducing for the real estate industry – and worse than October’s 36% drop – it should be noted that year-ago sales were inflated by an increase in buyers looking to purchase prior to implementation of federal mortgage stress tests. Nevertheless, sales momentum is muted as the combination of the stress tests, higher interest rates and provincial policies acts as a drag on activity. Our seasonally adjusted estimates suggest a mild drop in the sales flow from October. Annual sales are on track for about 41,000 units – a decline of close to 30% and the lowest level since 2012.
Home prices are moderating. The average home value rose 1% from October to $936,500 but is still down from an early-year peak of about $970,000.
A better measure is the MLS benchmark housing price index, which adjusts for sales attributes. The broad benchmark fell 0.5% from October and 4% from the spring peak of $989,710. Detached-home prices have stabilized following a year of declines, but apartments are shedding value. The benchmark price fell 1.3% seasonally adjusted from October. Further erosion of up to 5% is expected. •
Bryan Yu is deputy chief economist at Central 1 Credit Union.