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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
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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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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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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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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 $
5
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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
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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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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
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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
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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
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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
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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
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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
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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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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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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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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
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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.
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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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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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• 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
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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)
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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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