Tuesday, March 04, 2008

High Commodity Prices Drive BC's Economy - Record High Prices Supercharge BC's

Vancouver's Real Estate market is being driven to a large extent by record high demand for natural resources in China and India. These countries are industrializing developing their domestic economies at such a rate that China has recently overtaken the US for #1 spot in the consumption of many types of natural resources. This demand for our resources is having a huge positive effect on Canada's economy as well as Vancouver's real estate market.

More people working in Vancouver for better wages means more money for more real estate. Prices are still rising and with the recent interest rate cut, expect more price increases for Vancouver real estate.

I'd love to hear your thoughts! Feel free to post comments!


Canada's changing work force: a snapshot

Globe and Mail Update

Rising commodity prices have ignited demand for workers in everything from construction to energy, mining and retail, making Canadian employment growth the fastest among G7 nations, latest census data show.

Total employment in Canada swelled at an annual average rate of 1.7 per cent between 2001 and 2006, the fastest percentage increase among the Group of Seven nations, Statistics Canada said in its sweeping study of changes in the labour market.

“Employment rose in every part of the country,” the report said. “However, growth was strongest in the West, and especially in Alberta and British Columbia.”

The fastest employment growth was in the mining, oil and gas industries, where employment jumped at nearly four times the national average. “Alberta alone accounted for 70 per cent of the employment growth in this industry,” the report said.

Oil and gas well drillers, testers and related workers led the gains, soaring 78 per cent Growth in the larger construction sector increased 4.5 per cent on average per year, driven by low borrowing costs and a healthy economy. In the five-year period, the sector added almost 200,000 workers, particularly carpenters.

Canada's second-largest service industry — health care and social assistance — also added almost 200,000, translating into 2.6-per-cent growth on average each year, much more than the national average. The gains were widespread, from ambulatory services to medical laboratories to hospitals, the study said.

Healthy consumer demand also prompted growth among retailers such as grocery stores, building materials and supplies stores and car dealerships. The industry increased 1.8 per cent a year on average, putting the number of retail jobs at just over 1.8 million.

On the downside, factories shed 136,700 jobs during the five-year period, or a 1.4-per-cent drop per year, as the Canadian dollar appreciated and companies shifted jobs offshore.

The number of sewing machine operators plunged by a third, while the number of metal fabricators, including steel workers, also dwindled.

Many workers moved west. More than half a million people, or 3.4 per cent of the total work force, moved to a different province or territory in the five-year period, with mobility rates the highest in the territories and Alberta. Most of the movement took place in the mining, oil and gas and public administration industries in 2006, the report said.

Among cities, Barrie, north of Toronto, had the country's fastest employment growth, followed by Kelowna, Calgary and Edmonton.

Of the three largest cities —Toronto, MontrĂ©al and Vancouver— Vancouver had the highest employment growth, amid a flurry of condo and Olympic-related construction.

Both Toronto and Montréal experienced slower employment growth, though, compared with the previous five years. Both cities were hurt by factory losses, though Toronto was helped by strong housing and financial markets and Montreal by increases in the construction and child-care sectors.

Windsor appears to be suffering the worst. The southern Ontario town saw steep declines in auto parts manufacturing, prompting the jobless rate to hit 8.3 per cent by 2006 from 6.3 per cent in 2001. That's the third-highest in the country after Saguenay and St. John's, however, jobless rates in both Saguenay and St. John's declined during this five-year period.

Atlantic Canada and pockets in the North still have the country's highest jobless rates.

Immigrants are making up a greater share of the work force. Foreign-born residents made up more than one-fifth of Canada's labour force in 2006, a greater share than in 2001.

The employment rate for core working-age immigrants increased to 77.5 per cent in 2006 while the comparable rate for Canadian born workers was 82.4 per cent.

2 comments:

Anonymous said...

Natural resources are really going to be a serious problem soon. Canada itself is very rich on natural resources and it could be very prospective flow of money but …. It looks like China and India are able to consume everything. Very strong growth of NDP is based more on extensive than intensive factors and the pace is unbelievable. As a result we can expect a negative supply shock which as we now from the history is generally bad and doesn’t matter if you are net exporter or importer. I am dealing with real estate in Toronto and I see that transmission of mortgage crisis from US to Canada is not so strong but in the matters of natural resources …

Anonymous said...

Hi Toronto Realtor,

Thanks for your comments!

I don't see a large shock coming to commodity markets. This is because commodity demand at present is driven by development and industrialisation rather than the business cycle. I think we will see high commodity prices for the next few years, which will be very good for Western Canada and the Vancouver Real Estate Market in general.

I'd love to hear more comments.