Saturday, September 07, 2013

BC Economic Snapshot Sept. 7, 2013

VANCOUVER, BC, Sep 7, 2013/ Troy Media/ – Employment in British Columbia continued to be range bound in August according to the latest estimates from Statistics Canada. The number of working residents totalled 2.32 million persons, seasonally adjusted (SA), up by an insignificant estimate of 6,200 persons (0.3 per cent) from July.

Part-time employment increased while full-time work declined. Jobs in accommodation and food services grew, while jobs in construction declined. The unemployment rate was little changed at 6.6 per cent SA of the labour force.

In the first eight months of 2013, the average number of employed persons has not changed from the same period last year. The unemployment rate has averaged 6.7 per cent so far this year, down from 7.0 per cent this time last year.
Year-to-date, year-over-year job growth was entirely in the Lower Mainland, Kootenay and Vancouver Island Regions, offset by declines in the Thompson-Okanagan and Cariboo regions.

We forecast no increase in total employment in British Columbia this year, followed by growth of around 1.3 per cent next year. Employers have generally been reluctant to hire this year, adapting to what little real economic growth there is by shifting part-time workers to full-time tenure. B.C.’s unemployment rate is forecast to remain range bound around 6.7 per cent of the labour force.

International merchandise trade statistics for British Columbia show exports increased less than imports in July, increasing the trade deficit. International exports of goods originating in British Columbia totalled $2.7 billion, seasonally adjusted (SA), up $52 million (2.0 per cent) from June. International imports of goods destined for British Columbia totalled $3.9 billion SA, up $362 million (10.3 per cent). That left British Columbia’s international merchandise trade deficit at $1.2 billion SA in July, up $310 million (34.6 per cent) from June.

In the first seven months of 2013, exports totalled $19.2 billion, unadjusted, up 4.9 per cent from the same period last year. Year-to-date imports totalled $25.3 billion, up 3.5 per cent year-over-year. The trade deficit totalled $6.1 billion year-to-July, down a slight 0.6 per cent compared to last year. So far this year, export growth has been led by forest products, ores and minerals. This growth has been partly offset by lower exports of energy products.

Year-to-July import growth was led by consumer goods, energy products, food products and motor vehicles/parts. This growth was partly offset by lower imports of minerals and mineral products.

Merchandise trade, both international and interprovincial, remains a large drag on economic growth in British Columbia. British Columbia’s overall trade deficit, including goods, services, international and interprovincial, totalled $23.2 billion in 2012, up from $17.6 billion in 2011. We forecast this deficit will decline to $20.6 billion this year and $20.7 billion in 2014 as exports grow faster than imports.

Small Business
Confidence among small business owners in British Columbia remained range-bound in August according to the latest Business Barometer Index (BBI) from the Canadian Federation of Independent Business. The BBI registered 66.3, about the same reading seen over the last 12 months.

On a scale from 0 to 100, a reading above 50 means owners expecting improved business performance in the near term outnumber those expecting weaker performance. The BBI suggests economic growth in British Columbia was positive in August but likely remained below potential.

Owners intending to increase full-time staff in the next three months (22 per cent), outnumber those expecting to decrease (8 per cent). Owners indicating business conditions are good (37 per cent), outnumber those indicating bad conditions (14 per cent).

Insufficient domestic demand is the most commonly cited limit to growth (38 per cent). The most commonly cited cost pressures are taxes and regulation (67 per cent), as well as fuel, energy and wages (50 per cent).

Economic growth in British Columbia appears to have been very slow over the last 12 months, likely well below 1.0 per cent annualized. B.C.’s real GDP has grown by an average of 2.9 per cent per year since 1985. We are forecasting growth of only 1.1 per cent this year, implying some modest improvement in the second half. Next year’s growth forecast is 2.6 per cent.

Lumber production in British Columbia continued to rise in June, driven by sawmills in the northern interior region. Production totalled 2.58 million cubic metres, seasonally adjusted (SA), up 0.4 per cent from May.

Production increased 1.9 per cent SA in the northern interior region but declined 0.8 per cent SA in the rest of the province. In the first half of 2013, production totalled 15.48 million cubic metres in B.C., unadjusted, up 3.4 per cent from the same period last year. Shipments totalled 14.94 million cubic metres, up 1.8 per cent year-over-year.

Year-to- date production is up 5.7 per cent from last year in the northern interior region and 1.7 per cent in the rest of B.C. Looking ahead, forestry is one of the few industrial sectors with above average forecast growth. Rising demand and prices are driven by increasing new home demand in the U.S. and reconstruction efforts in Japan. Dollar volume output is rising more rapidly that quantity output since current U.S. demand can largely be supplied by domestic suppliers.

| Central 1 Credit Union


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