The provincial economy is still in the midst of a robust growth phase. Real
Employment growth is strong and appears only inhibited by the limited size of the workforce. As a result, the unemployment rate has fallen dramatically over the last few years and is forecast to average a low of 4.3 per cent this year, and 4.2 per cent in 2008. The goods sector is experiencing the largest employment gains, averaging a 7.3 per cent increase this year. Leading the way is mining (+20%), construction (+10%), and forestry (+14%). The service sector lags behind with employment increasing at a rate of 2.2 per cent. However, employment growth in transportation and warehousing, finance-related industry, and public administration are all exceeding the sector average.
Strong labour demand is putting upward pressure on wages. The goods sector is experiencing wage growth close to 6 per cent per annum, partly on the strength of BC’s construction boom, where wages are growing at a rate of 7 per cent per year. The service sector is not as prone to volatility in labour demand and as a result wages are increasing at a more modest rate of 2.2 per cent.
Low unemployment, job growth and rising wages are underpinning housing demand in the province. When the financial situation of BC households is improving, consumer confidence builds and consumer spending increases. Retail sales are forecast to rise 7.5 per cent this year and 7.2 per cent in 2008.
A robust provincial economy is a magnet for migration. While Alberta is maintaining its position as Canada’s preferred relocation address, BC is drawing an increasing number of migrants from other provinces. Net inter-provincial migration to the province is forecast to grow 7.3 per cent to 8,400 individuals this year, and a further 5.9 per cent to 8,900 individuals in 2008.
While this is a fraction of the 40,000 Canadians that migrated to BC in 1994, it is a marked improvement from the net losses recorded during the late 1990s. The natural rate of increase, the birth rate less the death rate, is not sufficient to sustain BC’s population. The provincial population would begin to decline around 2021 if not for migration. International migration is important to BC’s population growth, not to mention its role in bolstering the labour force.
Today, 80 per cent of total net migration is from international sources. Net international migration is forecast to increase 7.7 per cent to 39,000 individuals. The province’s robust economy is expected to continue attracting an increasing number of both inter-provincial and international migrants.
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Cheers, Anders Anders Treiberg, Associate Broker, REALTOR®
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