Transcript The BC Economy to 2010 and Beyond

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Recap of Outlook 2020 and Trends
Shaping BC’s Labour Market
presented to:
TECC-ASTTBC
June 25, 2010
Vancouver, BC
Business Council of
British Columbia
Ken Peacock
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Outlook 2020 Project
• Ambitious project examining BC’s economy
in the post Olympic decade
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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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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
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open and connected
successful exporter of goods and services
innovation-led
smart energy and environmental practices
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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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Exports Turn Up in Q1 2010
BC International Merchandise
Exports Exports, monthly S.A.
Exports, annual
35
2500
billions $
2300
30
25
20
2100
US
1900
Rest of World
1700
15
1500
10
1300
1100
5
0
millions $
900
02
03
US
Source: BC Stats.
04
05
Japan
06
07
China
08
09
700
2006
2007
2008
2009
2010
rest
Latest: March 2010
Global Economic Production Shifts to
Emerging Markets (% of world output)
25
2007
2014
20
15
10
5
0
China
India
Brazil
Russia
US
Japan
Germany
UK
Canada
• The Great Recession is expected to accelerate the shift of
global economic influence to China and other emerging
markets.
Source: IMF. National output measured using PPP exchange rates.
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Structure 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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Feeble Productivity Gains for BC
Growth in Real GDP per Hour Worked, Business Sector
2003-2008 annual average
Canada
Nfld & Lab
Man
Sask
PEI
Que
Alta
Ont
NB
NS
BC
-0.5
0.0
0.5
per cent
Source: Statistics Canada.
1.0
1.5
2.0
2.5
3.0
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Fewer Younger People…
Increase in BC Population Age 20-34
20
thousands
15
10
5
0
-5
Males 20-34
-10
projection
Females 20-34
-15
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
Source: BC Stats.
10
No Increase in “Middle Age” Population
Increase in BC Population Age 35-49
25
thousands
Males 35-49
20
Females 35-49
15
10
5
0
projection
-5
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
Source: BC Stats.
11
50 to 64 Cohort Still Expanding
Increase in BC Population Age 50-64
20
thousands
Males 50-64
15
Females 50-64
10
5
0
projection
-5
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
Source: BC Stats.
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Labour Force Growth Will Slow
BC Labour Force Growth
6
5
thousands
history
base case
alternative scenario
projection
4
3
2
1
0
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
Source: BC Stats and Business Council of BC for projections.
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Labour Force and Employment
Projections
100
Change in BC Labour Force &
Employment
thousands
80
60
40
20
0
-20
labour force
employment
alternative scenario
employment
-40
-60
projection
-80
90
92
94
96
98
00
02
04
06
08
10
12
14
Source: BC Stats and Central1 and Business Council of BC for projections.
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20
22
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Recent Provincial Projections
BC Labour Force & Demand Outlook
2,900
thousands
2,800
2,700
2,600
2,500
2,400
Demand Outlook
2,300
LF
2,200
09
10
11
12
13
14
Source: British Columbia Labour Market Outlook 2009-2019.
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16
17
18
19
15
Recent Provincial Projections
70
thousands
Change in BC Labour Force &
Employment
60
50
40
30
20
Demand Outlook
10
LF
0
10
11
12
13
14
15
Source: British Columbia Labour Market Outlook 2009-2019.
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17
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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
Regional Projections
Regional Labour Supply and Demand, 2015
1,800,000
61,930
1,600,000
Demand
1,400,000
Supply
1,200,000
1,000,000
supply less demand
800,000
600,000
400,000
200,000
0
-3,260
1,540
-1,210
Lower
Vancouver Thompson Kootenay
Mainland
Island
Okanagan
Source: British Columbia Labour Market Outlook 2009-2019.
-2,390
-1,230
Cariboo
North
Coast
-720
Northeast
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Supply / Demand Balance by Select
Occupations, BC
demand
supply
demand
supply
2015
2019
2015
2019
Managers, engineering,
science & info systems
9,330
9,580
10,150
10,180
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.
Supply less Demand
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BC’s Future Success
• No room for complacency
• Role for government – establish attractive
hosting conditions
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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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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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BC’s Future Success
• 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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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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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)
Conclusions
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BC Labour force growth will slow, but not
dramatically
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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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