recap of outlook 2020 and trends shaping bc’s labour market
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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 PresentationTRANSCRIPT
Recap of Outlook 2020 and Trends Shaping BC’s Labour Market
presented to:
TECC-ASTTBCJune 25, 2010Vancouver, BC
Business Council of British Columbia
1
Ken Peacock
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
2
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
3
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)
4
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
Global Economic Production Shifts to Emerging Markets (% of world output)
6
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
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
7
8
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
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
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
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
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
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
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
14
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
15
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
16
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
18
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.
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
20
• 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
21
BC’s Future Success BC’s Future Success
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
22
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)
23
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
24