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Data points: B.C. job market resilient as SMEs’ short-term confidence falls

Still, only 28 per cent of B.C. SMEs consider themselves to be in a good state of business health
B.C. employers reported an increase in payroll counts in May.

B.C. employers reported an increase in payroll counts in May, which was the third consecutive monthly gain.

From the latest Survey of Employers, Payroll and Hours (SEPH), seasonally adjusted positions rose 0.6 per cent (15,701 positions), bringing the total job count in B.C. to 2.55 million.

The estimates from the Labour Force Survey (LFS) reported a marginal increase in B.C. employment, with 1,400 more people (0.1 per cent) employed during the same month. Both continue to highlight a resilient job market that has yet to be drastically affected by the tightened monetary policy. However, the seasonally adjusted job vacancy rate in May came in at 4.7 per cent, which represents 118,370 positions. It is also the lowest vacancy rate since April 2021 pointing to some slackening in conditions.

May’s job increases came across the board with service-producing industries showing a 0.6-per-cent monthly increase, while goods producing industries showed a 0.5-per-cent increase. Forestry (1,076 positions) and construction (974 positions) led the way in the goods-producing sectors. Service-producing sectors were led by public administration (8,798 positions), health care and social assistance (1,192) and arts, entertainment and recreation (1,106).

The only industries that saw fewer positions were accommodation and food services (down 921), finance and insurance (down 641), professional, scientific and technical services (down 350) and manufacturing (down 183).

On the wage front, seasonally adjusted average weekly earnings jumped 4.5 per cent to $1,211.65 on a year-over-year basis, which is higher than last month’s 3.3-per-cent increase. Month over month, average weekly earnings increased 0.7 per cent in May.

Confidence among B.C. small and medium-scale enterprises (SMEs) continued to trend lower in July according to the Business Barometer survey released last week by the Canadian Federation of Independent Business. The long-term index was unchanged at 54.7 points and still above the index’s neutral benchmark of 50 points. The short-term three-month index was down to 46.7 points from 48.5 the previous month. The results point to weaker expectations for business performance among small business owners in B.C. Contributing factors to the deterioration in short-term expectations could include higher interest rates and the short-lived port strike.

Regarding general business indicators, only 19 per cent of small businesses in B.C. plan to expand full-time staff and only 28 per cent of B.C. SMEs consider themselves to be in a good state of business health. A lack of skilled labour was the major issue that stood out among other limitations on sales or production growth. Wage costs continued to be the greatest input cost constraint among SMEs, while tax and insurance costs were also on the top of the list of cost constraints.

Nationally, the Canadian small business optimism index changed slightly in July. The 12-month index came in at 54.2 and the three-month index was almost unchanged at 49. Both indices were still below their historical average levels. The long-term optimism improved in some sectors in July, with notable growth seen in the retail, finance, insurance and real estate sectors.•

Bryan Yu is chief economist at Central 1.