Province Upgrades Economic Forecast
Force Survey contains both good and bad news for
B.C. Employment in November was up by 9.9 thousand from
October, but down by 40.3 thousand relative to November 2008.
Unfortunately, all of B.C.'s November gain was in part-time
employment. Full-time employment fell by 11.7 thousand from
October and was down 74.5 thousand from a year earlier.
employment rose by 79.1 thousand in November, including
a 38.6 thousand gain in full-time employment. Canada has 309.1
thousand fewer full-time jobs than a year earlier. As of November
2009 B.C. represented 24% of the national full-time job losses
over the last 12 months. Not only does B.C. represent a disproportional
share of national job losses, while most of the rest of the
country is recovering, B.C. is still bleeding full-time jobs.
bad news from the Labour Force Survey comes on the heels of
the November 27th release of the province's financial results
for the first six months of its fiscal year (Second Quarter
Report), April through September 2009. Hansen
tried to be optimistic about the province's performance,
claiming that the budget deficit is still forecast to be $2.8
billion (up from not a penny more than $495 million before
the election). His Second Quarter Report projected a revenue
decrease of $232 million compared to the September Budget
Update. Holding the deficit to $2.8 billion meant using half
of his budget's forecast allowance. Hansen's projections might
not withstand further bad news before the fiscal year ends
on March 31st.
bad news is what the welfare
statistics show. The temporary assistance caseload as
of October 30, 2009 is up 54% relative to a year earlier,
more than double the 2006 average (the low-point). Income
assistance in all categories, including disability assistance,
is up by 16.7% as of the end of October relative to 12 months
earlier, and up 30% relative to the 2006 average. Those statistics
indicate thousands of personal tragedies as well as "cost
pressures" on Hansen's budget.
are all in the lifeboat together and want to see economic
recovery, but it doesn't help the spirits of people needing
income assistance or families still receiving pink slips when
they hear B.C.'s Minister of Finance understate the challenges.
On the day we learned that B.C. lost 11.7 thousand full-time
jobs, Hansen released an update
from the province's Economic Forecast Council, made up
of 14 economists. His news release reported: "On average,
the council now expects B.C.'s economy to post 2.9 per cent
growth in 2010, upgraded from the 2.5 per cent growth projected
in the September Update this year." The economists might
like to reconsider their estimates in light of today's Labour
Force Survey, although many would say employment is a lagging
founded on a renewed real estate bubble or hopes about commodity
prices appears premature. Some economists have argued
that the Olympics will give B.C. a boost, but the PriceWaterHouseCoopers'
report on the impact of the games between 2003 and 2008 estimated
that 18,362 person years of employment were created (relative
to over 2 million employed in BC); it also estimated that
the real GDP impact was $788 million (relative to a $100 billion
a year GDP). In other words, the pre-games economic impact
was as small as the measurement error. The two weeks of the
games may be fun for some, but the economic impact will be
negligible for just that two week period. The lasting impact
is expected to come from increased tourism, particularly from
increased convention business in the new Convention Centre.
That will be a testable theory; however, benefits attributed
to the Convention Centre over the next 20 or 30 years will
not be substantial in any one year, certainly not substantial
enough to lift the GDP and employment growth figures for 2010.
is paid to many economic forecasts, but little is said about
how many miss their mark. This year is an exception due to
the enormous error between what the BC Liberals said about
the government deficit before and after the election. Some
will be watching to see if their pattern of inaccurate predictions
continues over the next few years.