According to CPABC Regional Check-Up, an annual economic report by the Chartered Professional Accountants of British Columbia, population growth, a rise in tourism, and a robust and diversified economy contributed to record employment growth on Vancouver Island in 2016. Unemployment also fell to its lowest level since 2008. New jobs in Victoria represented 67.4 per cent of the 9,200 new jobs created in the Vancouver Island/Coast Development Region. Victoria’s impressive surge in employment propelled the area’s greatest job growth since 2010.
Population growth and increased housing activity led to upward demands for our region’s services, particularly in the Capital Regional District (CRD). This, in turn, increased employment in the service sector by 6,500 jobs, or 70 per cent of total job creation in the region. The largest growth occurred within the public sector, which grew by 5,100 positions. Significant gains were also reported in the business, building and support services industry which added 3,700 new jobs. New professional, scientific and technical services jobs accounted for 2,600 positions.
The goods sector also benefitted from a hot housing market in 2016, with 1,700 new jobs added to the construction industry. Record-breaking real estate sales drew down inventories of new and resale homes, stimulating housing starts and boosting employment in construction. A 27 per cent increase in housing sales and a 12 per cent increase in prices drew down existing inventories. Housing starts increased accordingly, predominantly in Victoria, where they jumped by 46 per cent. In addition, the region’s population saw its highest growth rate since 2008, which further contributed to employment increases. Victoria and Nanaimo attracted the vast majority of newcomers, welcoming 81 per cent of the region’s new residents.
Other goods industries also saw positive gains, with another 1,500 jobs added in agriculture in response to favourable weather and crop production. Higher agricultural output also led to an increase of 1,300 new positions in food and beverage manufacturing. Employment in wood product manufacturing rose by 700 positions due to increased exports. The only industry to see a reduction in the number of jobs was the mining industry, likely linked to depressed commodity prices and reduced mining activity.
Looking ahead, employment growth and economic conditions in our region should remain relatively robust. To date, employment continued to expand, from 378,500 people employed in December 2016 to 381,600 in April 2017. The low Canadian dollar combined with travel restrictions to the US will bode well for our region’s vibrant tourism sector. Our region should fare well if forecasted tourism and population growth are realized given we are a predominantly service sector-based economy. However, renegotiation of the North America Free Trade Agreement is likely to affect the forest sector, with potential negative impacts on local economies.
By Chuck Chandler, FCPA, FCA, is a partner at Grant Thornton LLP in Victoria.
The 3rd annual ‘State of the Island’ Economic Report will be released at the Economic Summit, October 25/26 in Nanaimo.