Decline in exports dampened B.C.’s economy in 2012

British Columbia experienced a slowdown in economic expansion last year, from 2.6% in 2011 to 1.7%, according to BC Check-Up, a report issued by the province’s professional accountants.

“There are several contributing factors behind this lower growth rate,” says Richard Rees, CEO of ICABC. “A decline in the value of exports, a slower housing market, and reduced government spending had negative impacts on our economy’s rate of growth.”

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He adds, “Lower than expected natural gas and mineral prices affected resource company revenues and reduced royalties collected by the provincial government.”

While these factors dampened growth in 2012, there were some positive signs for the coming year.

“Exports are expected to lead B.C. out of its late 2012, early 2013 rough patch,” says Gordon Ruth, CEO of CGA-BC. “Merchandise exports during the first five months of 2013 were 4.2% higher than during the same period in 2012, due primarily to demand growth in the U.S. and China.”

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Further, continued export growth throughout this year should stimulate job creation and consumer spending.

“RBC is predicting a 1.6% real GDP growth rate in 2013, and 2.7% in 2014,” says Ruth.

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Additional findings include:

• A stronger U.S. housing market and the subsequent demand for B.C. softwood lumber resulted in increased manufacturing employment in the province’s forest industry;
• BC’s job creation rate was 1.7%, an increase of 37,800 jobs over 2011; and
• BC’s labour force educational attainment (the percentage of the labour force aged 25 to 64 with post-secondary accreditation) increased by 0.7 percentage points, to reach 66.6%.

Still, some labour market problems persist, including the high rate of unemployed young workers.

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“The youth unemployment rate stayed above 13% for the fourth year in a row,” says Vinetta Peek, president and CEO of CMABC. “In addition, BC’s business labour productivity, a key economic indicator, declined by 1.6%, and the value of exports per worker declined by 5% in 2012.”

The report also found B.C.’s consumer debt per capita rose by 2.9%, but this was below the national average growth rate of 4.2%.