Tuesday, September 11, 2012

BC Employment by Sector August 2012

Below are some graphs highlighting BC's employment over the past 15 years in various sectors. But first here are the historical employment, participation, and unemployment rates (CANSIM table 282-0117)
And the spreads between the rest of BC and Vancouver CMA.

Here are the contributions of the two major goods producing sectors (construction and manufacturing) as a percentage of total employment. These are seasonally unadjusted with 3 month moving average applied (CANSIM table 282-0111).
And the service producing sectors (pardon the non-seasonally-unadjusted data, but look at codes 61 and 62!).

A rebound of manufacturing sector employment can plausibly indicate some degree of job reclassification rather than a sectoral shift in employment. To highlight this, I have charted is the 12-month moving-average correlation and slope of construction and manufacturing employment as % of workforce. What this chart shows is that over the past year construction and manufacturing employment changes have been near perfectly negatively correlated and a near 1-1 offset of construction jobs to manufacturing jobs. This is not necessarily proof of re-classification but it is certainly something I would consider as plausible.

Construction employment is still high relative to its historical limits of the past 15 years and remains a larger part of BC's workforce than previous. If construction were to stumble closer to levels seen earlier in the century, there is some hope that manufacturing can fill at least some of the gap, though if construction job flux is simply being reclassified as manufacturing and does not represent a secular rotation, BC's dependency on construction employment is not abating and remains an elevated risk to future economic growth. This is an important factor for BC as there is indication that sectors that are "non-tradeable" are more prone to prolonged high unemployment when coupled with elevated regional debt-income ratios, the latter a situation in which BC unfortunately finds itself. The recent correlation of construction to manufacturing is of some concern as it indicates that some of BCs manufacturing employment is in effect "non-tradeable".

In sum it appears on balance that BC's economy has continued to slowly recover alongside the rest of North America, but the most recent data indicate BC is far from out of the woods.

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