Housing starts in BC jumped in August, but the increase does not indicate strength in the construction cycle as new projects remain paused due to poor market conditions, excess inventory and saturated rental markets.

Urban BC housing starts rose by 39% to a seasonally adjusted annualized rate of 39,715 units, following three consecutive monthly declines. The increase was driven by a 44.6% jump in multi-family starts, while single-family starts declined 1.7%.

However, housing starts fluctuate from month-to-month, and the six-month moving average remained subdued. On a year-over-year basis, housing starts in urban centres fell 7.6% and were down 9.7% year-to-date. Both multi-family and single-family starts declined at a comparable pace during the first eight months of the year.

Within multi-family housing, the year-to-date decline was driven by a 13.6% decrease in apartment starts, which account for most new housing construction in the province. In contrast, semi-detached and row housing starts increased 30.4% and 0.8%, respectively.

Among BC’s major urban markets, year-to-date, starts declined in Abbotsford-Mission (-47.7%), Kelowna (-35.5%), Vancouver (-6%), and Victoria (-40.8%). In contrast, starts increased by 41.7% in Chilliwack and by 70.3% in Nanaimo, while starts in Kamloops more than doubled compared with the same period last year.

Despite weaker starts, more than 84,000 units remain under construction across BC, primarily apartments in Vancouver, reflecting earlier construction decisions and long project completion timelines. Low pre-sale sell-through and weak residential building permit activity signal slower construction ahead, raising concerns about future housing supply and affordability.

On the employment front, business-reported payroll counts in BC were essentially unchanged in July, edging down by 514 positions, or less than 0.1%, to approximately 2.59 million. This followed a similarly modest decline of 329 positions in June. Payroll employment remained 0.7%, or 19,962 positions, above its year-earlier level. Nevertheless, the recent monthly weakness points to subdued employment growth.

Excluding unclassified businesses, payroll employment declined by 1,304 positions. This measure provides the basis for the industry breakdown below. By comparison, the Labour Force Survey reported a monthly employment increase of 17,800 in July, although the two surveys measure employment differently.

Goods-producing industries lost 554 payroll positions in July, leaving employment 0.6%, or 2,124 positions, below its year-earlier level at approximately 388,990.

Manufacturing posted the largest monthly decline, shedding 754 positions, and was down 1,213 positions from a year earlier. Construction employment fell by 568 positions during the month and by 436 year-over- year. In contrast, utilities added 554 positions in July and 1,090 positions over the previous 12 months.

Service-producing payroll employment declined by 750 positions in July but remained 1.3%, or 29,118 positions, above its year-earlier level.

Accommodation and food services led the monthly gains, adding 870 positions and recording a fourth consecutive increase. Administrative and support, waste management and remediation services added 660 positions, reversing the previous month’s decline. Educational services recorded the largest monthly decrease, losing 803 positions, while health care and social assistance declined by 800 positions. Despite these monthly declines, health care and social assistance posted the largest year-over-year gain, at 10,376 positions, followed by educational services at 7,486 positions.

Average weekly earnings rose 0.6% in July and by 4.5% from a year earlier, reaching $1,356.78. The increase was robust but partly reflected the composition of hiring. The job vacancy rate remained at 3.1% for a third consecutive month, corresponding to approximately 79,585 vacant positions.

BC Housing Starts Rebound in August Despite Weak Construction Outlook by Bryan Yu | Chief Economist | Central 1 | BIV