B.C.’s unemployment rate approached a record low of 4.7% in July, but news of layoffs and an economic slowdown are creeping into the picture.
The figure is little changed from 4.6% in June, according to Brian Yu, chief economist at Central 1 Credit Union, showing positive signs such as growth in full-time employment and higher wages.
“The headlines are still a very tight labor market,” Yu said. “[But]in the broader economy, I think there will be a lot of headwinds.”
Headwinds such as the retirement of baby boomers are overtaking new workers, especially in the public sector. Rising interest rates and inflation are also impacting consumer sales.
For example, online marketing company Unbounce announced this week that it will cut 20% of its workforce by 47 people. Online retailer Article Furniture is cutting his 216 jobs nationwide. This corresponds to 17% of your salary. has not come yet.
“That’s the challenge for Shopify,” he said, referring to the Canadian online retail giant’s announcement of 1,000 layoffs last month and bets that the pandemic boom in online shopping will continue.
Instead, consumers are returning to browsing in brick-and-mortar stores, “and there will probably be more layoffs,” Yu added.
“Given what we’re looking at more broadly, this kind of cascading effect seems to be coming out about every two days from different companies,” said Yu. “Probably not finished yet.”
He also expects unemployment to cascade from a slowdown in home sales caused by rising interest rates that put pressure on homebuyers.
In Metro Vancouver, July home sales fell 43% year-over-year, with some of the change in employment occurring in the sector that caters to homebuyers.
Overall, British Columbia’s commodity manufacturing sector, manufacturing, construction and natural resources industries lost some momentum, cutting 2,000 jobs in July and losing 500,000 jobs.
However, the much larger services sector added about 2,500 jobs in July, bringing employment to 2.45 million, despite some weakness.
The wholesale and retail sector lost 1,500 jobs, down to 427,600 jobs in July, according to Statistics Canada. Transportation and warehousing were broadly flat at 141,000 jobs, down 200 from June.
“On the net, I think we’re probably going to start seeing a little bit of erosion in overall employment numbers,” Yu said. “But again, it’s offset in certain service sectors that are still on the rise, such as tourism.”
In the health care and social assistance sector, employment fell by 9,300 to 375,000 in July, which likely represents a loss of personnel due to retirement and other factors, Yu said.
“It could be a permanent loss of supply (of labor),” Yu said. “And when they retire, they drop out of both the employment numbers and the workforce numbers.”
Nationally, Statistics Canada says the number of older women in the workforce is declining, Yu said. While these numbers aren’t as stark as state figures, the number of women over the age of 25 in BC’s workforce has dropped by 3,200.
The number of women employed in that group also fell by 3,500 to just under 1.4 million.
“The more frustrating part I think about this is that this was foreseen,” said Adrian Gere, vice president of the BC Nurses Union, which counts about 4,300 vacant nursing positions in the state.
She buys over-stressed mid-career nurses who retire because not only are they retiring sooner than nurses can replace them, but B.C.’s tight labor market gives them the option to try something else. He added that he would not.
“It’s not a complicated formula,” Gere said. “What is missing is a health and human resource strategy and investment in nursing.”
BC Unemployment Rate Is Little Changed, But Faces Headwinds
Source link BC Unemployment Rate Is Little Changed, But Faces Headwinds