Recap of Outlook 2020 and Trends Shaping BC’s Labour Market

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Recap of Outlook 2020 and Trends Shaping BC’s Labour Market presented to: TECC-ASTTBC June 25, 2010 Vancouver, BC B u sin e ss C o u n cil of B ritish C olu m bia 1 Ken Peacock

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1. Recap of Outlook 2020 and Trends Shaping BC’s Labour Market. presented to: TECC-ASTTBC June 25, 2010 Vancouver, BC. Ken Peacock. 2. Outlook 2020 Project. Ambitious project examining BC’s economy in the post Olympic decade 28 topic papers 15 dialogue sessions 4 half-day conferences - PowerPoint PPT Presentation

Transcript of Recap of Outlook 2020 and Trends Shaping BC’s Labour Market

Page 1: Recap of Outlook 2020 and Trends Shaping BC’s Labour Market

Recap of Outlook 2020 and Trends Shaping BC’s Labour Market

presented to:

TECC-ASTTBCJune 25, 2010Vancouver, BC

Business Council of British Columbia

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Ken Peacock

Page 2: Recap of Outlook 2020 and Trends Shaping BC’s Labour Market

Outlook 2020 Project Outlook 2020 Project • Ambitious project examining BC’s economy

in the post Olympic decade» 28 topic papers» 15 dialogue sessions» 4 half-day conferences » staff research

• Question: how to best position BC for success in the next decade

» intended to bring forward ideas and policy directions for positive, realistic agenda

» still a work in progress; views of the Business Council not yet finalized

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Page 3: Recap of Outlook 2020 and Trends Shaping BC’s Labour Market

Basic Messages Basic Messages

• Vision for BC» increasingly innovative and knowledge driven» rich resource base critical part of our success» Gateway for trade and commerce between

North America and Asia

• Hallmarks for our economy in 2020» open and connected» successful exporter of goods and services» innovation-led» smart energy and environmental practices

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Page 4: Recap of Outlook 2020 and Trends Shaping BC’s Labour Market

Trends Shaping the Economic Landscape Trends Shaping the Economic Landscape

• In many ways BC will be similar a decade from now (US, immigration, services)

• But change will also come from» globalization (more companies involved in trade)

» rise of emerging markets

» growing importance of science, technology & innovation (exports)

» demographics (older and more diverse)

» environment and energy (BC will be part way down path to low-carbon economy)

» urbanization

» human capital and knowledge (higher skill intensity of work)

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Page 5: Recap of Outlook 2020 and Trends Shaping BC’s Labour Market

Exports Turn Up in Q1 2010

Exports, annual

0

5

10

15

20

25

30

35

02 03 04 05 06 07 08 09

US J apan China rest

BC International Merchandise Exports

Source: BC Stats. Latest: March 2010

billions $

Exports, monthly S.A.

700

900

1100

1300

1500

1700

1900

2100

2300

2500

2006 2007 2008 2009 2010

US

Rest of World

millions $

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Page 6: Recap of Outlook 2020 and Trends Shaping BC’s Labour Market

Global Economic Production Shifts to Emerging Markets (% of world output)

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Source: IMF. National output measured using PPP exchange rates.

• The Great Recession is expected to accelerate the shift of global economic influence to China and other emerging markets.

0

5

10

15

20

25

China India Brazil Russia US Japan Ger-many

UK Canada

2007 2014

Page 7: Recap of Outlook 2020 and Trends Shaping BC’s Labour Market

Structure and Strategic DirectionsStructure and Strategic Directions

• BC Economic Structure (high level)» small, open, trade-dependent

» resources still important

» services = a big share of economic activity and a growing source of exports

• Strategic directions to 2020» human capital – top priority

» productivity agenda

» unleashing the north’s potential

» innovation and commercialization

» expanding tradable services

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Page 8: Recap of Outlook 2020 and Trends Shaping BC’s Labour Market

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Feeble Productivity Gains for BC

Source: Statistics Canada.

Growth in Real GDP per Hour Worked, Business Sector2003-2008 annual average

-0.5 0.0 0.5 1.0 1.5 2.0 2.5 3.0

BC

NS

NB

Ont

Alta

Que

PEI

Sask

Man

Nfld & Lab

Canada

per cent

Page 9: Recap of Outlook 2020 and Trends Shaping BC’s Labour Market

Fewer Younger People…

Source: BC Stats.

Increase in BC Population Age 20-34

-15

-10

-5

0

5

10

15

20

76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18 20 22 24

Males 20-34

Females 20-34

thousands

9

projection

Page 10: Recap of Outlook 2020 and Trends Shaping BC’s Labour Market

No Increase in “Middle Age” Population

Source: BC Stats.

Increase in BC Population Age 35-49

-5

0

5

10

15

20

25

76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18 20 22 24

Males 35-49

Females 35-49

thousands

10

projection

Page 11: Recap of Outlook 2020 and Trends Shaping BC’s Labour Market

50 to 64 Cohort Still Expanding

Source: BC Stats.

Increase in BC Population Age 50-64

-5

0

5

10

15

20

76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18 20 22 24

Males 50-64

Females 50-64

thousands

11

projection

Page 12: Recap of Outlook 2020 and Trends Shaping BC’s Labour Market

Labour Force Growth Will Slow

Source: BC Stats and Business Council of BC for projections.

BC Labour Force Growth

0

1

2

3

4

5

6

76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18 20 22 24

historybase casealternative scenario

thousands

12

projection

Page 13: Recap of Outlook 2020 and Trends Shaping BC’s Labour Market

Labour Force and Employment Projections

Source: BC Stats and Central1 and Business Council of BC for projections.

Change in BC Labour Force & Employment

-80

-60

-40

-20

0

20

40

60

80

100

90 92 94 96 98 00 02 04 06 08 10 12 14 16 18 20 22 24

labour forceemploymentalternative scenarioemployment

thousands

13

projection

Page 14: Recap of Outlook 2020 and Trends Shaping BC’s Labour Market

Recent Provincial Projections

Source: British Columbia Labour Market Outlook 2009-2019.

BC Labour Force & Demand Outlook

2,200

2,300

2,400

2,500

2,600

2,700

2,800

2,900

09 10 11 12 13 14 15 16 17 18 19

Demand Outlook

LF

thousands

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Page 15: Recap of Outlook 2020 and Trends Shaping BC’s Labour Market

Recent Provincial Projections

Source: British Columbia Labour Market Outlook 2009-2019.

Change in BC Labour Force & Employment

0

10

20

30

40

50

60

70

10 11 12 13 14 15 16 17 18 19

Demand Outlook

LF

thousands

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Page 16: Recap of Outlook 2020 and Trends Shaping BC’s Labour Market

Thoughts on Skill Shortages• Widespread and sustained skill shortages not likely

» markets adjust» wages, participation rates, immigration change» companies invest in more capital

• 1970s to mid 1990s were the aberration – period of labour abundance» baby boomers and women entering the workforce

• Industry specific skill shortages will emerge» takes time for labour markets to adjust » higher skill occupations will likely face more significant

shortages (regional shortages also an issue)

• Higher paying industries should be able to attract workers» critical issues are the quality of workers and capacity to

train people

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Page 17: Recap of Outlook 2020 and Trends Shaping BC’s Labour Market

Regional Labour Supply and Demand, 2015

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

1,600,000

1,800,000

LowerMainland

VancouverIsland

ThompsonOkanagan

Kootenay Cariboo NorthCoast

Northeast

Demand Supply

Regional Projections

Source: British Columbia Labour Market Outlook 2009-2019.

-3,260

1,540

-1,210 -2,390 -1,230 -720

61,930

supply less demand

Page 18: Recap of Outlook 2020 and Trends Shaping BC’s Labour Market

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Supply / Demand Balance by Select Occupations, BC

demand supply

demand supply Supply less Demand

2015 2019 2015 2019

Managers, engineering, science & info systems

9,330 9,580

10,15010,180

250 30

Technical occs. physical sciences

4,680 4,780

5,060 5,070

100 10

Technical occs. life science

8,780 8,860

9,300 9,300

80 0

Technical occs. civil & ind. engineering

6,660 6,810

7,240 7,260

150 20

Technical occs. electronics & electrical engineering

14,700 15,030

15,740 15,800

330 60

Technical occs. architecture, surveying

10,060 10,290

11,050 11,070

230 20

Source: British Columbia Labour Market Outlook 2009-2019.

Page 19: Recap of Outlook 2020 and Trends Shaping BC’s Labour Market

BC’s Future Success BC’s Future Success

• No room for complacency

• Role for government – establish attractive hosting conditions

» human capital» infrastructure» public institutions» business climate

• Importance of human capital cited in many of the papers

» shortage of key technology workers and senior technology talent management a constraint on growth

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Page 20: Recap of Outlook 2020 and Trends Shaping BC’s Labour Market

BC’s Future Success BC’s Future Success • Investing in human capital is increasingly

important as knowledge, skills and creativity play a lager role

• Gaps in talent development» educational attainment of First Nations (Dan

Perrin) especially relevant to resource industries

» early childhood education (Clyde Hertzman)» estimated 20-25% of youth population fails to

get adequate skills to become productive adults

» addressing early childhood development requires significant resources

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Page 21: Recap of Outlook 2020 and Trends Shaping BC’s Labour Market

• Immigration requires more attention» occupational bodies should simplify

certification process and devise transition programs for immigrants with appropriate credentials and language skills

» expand the PNP program» explore the potential to encourage new

comers to settle in areas outside of the lower mainland

• Economic conditions in California could help BC attract talent

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BC’s Future Success BC’s Future Success

Page 22: Recap of Outlook 2020 and Trends Shaping BC’s Labour Market

Issues for Government Policy• Allocation of tax dollars across public post

secondary institutions and programs» proliferation of universities» capacity for technical and other career training» another BCIT – Alberta example?

• Immigration (temporary and permanent)

• Under represented groups

• Retraining of displaced and older workers

• Tax incentives

• Childcare

• Escalating health care costs could crowd out other important investments

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Page 23: Recap of Outlook 2020 and Trends Shaping BC’s Labour Market

BC’s Medium Term Outlook: Positive Factors

• Asia’s growing economic clout » BC well positioned – gateway» “Great Recession” has accelerated Asia’s rise

• Higher commodity prices provide a lift

• More competitive tax regime

• Significant investments in infrastructure » airports, ports, highways, energy

• Attractive destination for immigrants » driver of population growth

• Skilled and increasingly well educated workforce

• Recovery in US is coming (housing/lumber markets poised to rise)

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Page 24: Recap of Outlook 2020 and Trends Shaping BC’s Labour Market

Conclusions Conclusions • BC Labour force growth will slow, but not

dramatically» modest changes in participation rates and immigration

have meaningful impacts» there are enough people – issue is training/skills and

urban pull

• Industry specific shortages will translate into higher wages

• Workers will shift to industries paying higher wages

• Economic recovery + demographics = labour market tightening

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