British Columbia's economy is experiencing a noticeable slowdown, with October data revealing a dip in employment and flat home sales. Economic uncertainty, trade issues, and a soft real estate market are collectively impacting hiring and consumer confidence across the province.
Key Takeaways
- B.C.'s employment declined slightly in October, lagging behind national growth.
- The housing market shows resilience in prices but a significant drop in sales volume.
- Goods-producing industries, particularly natural resources and construction, saw notable job losses.
- Buyer hesitation in the housing market is driven by economic uncertainty and affordability concerns.
Employment Figures Show Weakness
While the national labor market saw a surprise increase in employment in October, British Columbia experienced a deterioration. Provincial employment nudged down by 0.1 percent, or 2,900 individuals, limiting year-over-year growth to 1.2 percent, which is below the national performance of 1.4 percent. The unemployment rate in B.C. rose to 6.6 percent, though it remains below the national average of 6.9 percent. The labor force expanded slightly, but full-time employment remained largely unchanged, while part-time employment saw a decrease of 0.5 percent.
The overall trend points to persistent softness in B.C.'s labor market. The Vancouver Census Metropolitan Area reported a 0.3 percent decrease in employment, with its unemployment rate climbing to 6.3 percent.
Sector-Specific Impacts
The goods-producing industries were particularly affected, with employment falling by 1.5 percent. Significant declines were observed in natural resources (-9.1 percent) and construction (-1.8 percent). These losses were partially counteracted by gains in agriculture and utilities.
Conversely, the services-producing industries reported an overall gain of 0.2 percent. This growth was primarily driven by increases in transportation and warehousing, education services, and wholesale and retail trade. However, employment decreased in sectors such as accommodation and food services and business, building, and other support services.
Housing Market Stalemate
B.C.'s Lower Mainland housing market remained in a weak holding pattern throughout October, with sales continuing to slump. Local real estate board data indicated a 14.8 percent decrease in unit sales compared to the previous year. While sales have recovered from a spring lull, they remain significantly below pre-pandemic levels despite substantial population growth.
Buyer hesitation is high due to trade war impacts on the Canadian economy, elevated unemployment, and affordability challenges. Although prices have softened from their peak and interest rates have decreased, younger households continue to struggle with purchasing power. Elevated active listings and new home supply are contributing to fears of further price declines and equity loss, with active listings up 14 percent year-over-year.
Despite the soft market conditions, some price stability was noted. The average price in the region saw a modest year-over-year increase of 0.7 percent, reaching $1.183 million. However, quality-adjusted price indexes show a deeper downturn, with the composite price index falling 13 percent from its peak, though it has held steady in recent months. Challenging conditions are expected to persist until greater economic certainty emerges.
