Cover Story
Working, Investing, and Living in
Regional BC in 2014
By Marlyn Chisholm
BC’s economy continued to expand
British Columbia saw improved economic performance in 2014, and
there are signs that growth will continue throughout 2015.
Several factors contributed to BC’s improved performance last year.
Job growth was one of them, as a total of 12,800 new jobs were created
in this province in 2014. BC also experienced a real GDP gain of
2.4%, which was second only to Alberta’s gain of 3.8%, and exports
continued to drive the economy, with the value of exports rising by
6.3% to reach almost $36 billion. The US played a critical role in this
growth, with its swelling residential construction sector and greater
demands for natural gas.
Last year also saw BC’s population rise by approximately 1.06% to
reach 4.63 million—an increase of 48,677 persons. Most of this
growth was propelled by international in-migration, particularly in the
Mainland/Southwest Development Region. In absolute terms, population
changes elsewhere in BC were either small or slightly negative.
BC’s retail sales also grew in 2014, increasing by 6.0%, which surpassed
the national average growth rate of 4.9%.1 In addition, consumer
insolvencies declined in our province, and provincial labour market
conditions improved slightly. The unemployment rate also declined
in 2014, decreasing from 6.6% to 6.1%. This drop corresponded with
an increased number of employment opportunities and little growth
in the overall labour force size.
There were some downsides last year, however. Despite rising exports
of natural gas to the US in 2014, the overall value of BC’s energy
exports declined in 2014, largely due to a slump in the demand for
and price of coal. Additionally, reduced industrial activity in China
dampened that country’s imports of BC’s steelmaking coal. Still, there
were some gains in BC’s exports of solid wood products, pulp and
paper products, and metallic minerals (particularly copper ore and
concentrate).
The US continues to account for approximately half of BC’s exports.
The Pacific Rim, including Japan, remains BC’s second-largest export
destination, with China accounting for a rising share every year over
the past decade except in 2014. Last year, 18% of the value of BC’s
exports was destined for Mainland China, compared to 3.9% in 2005,
9.9% in 2009, and 19.8% in 2013.2
As a province that is less reliant on the oil and gas sector, BC has
a favourable medium-term economic outlook. Our province’s real
GDP is projected to grow by 2.6% in both 2015 and 2016.3 A weaker
Canadian dollar is expected to stimulate tourism demand among
both domestic and international visitors, and manufacturing sales
(of food and wine products, for example) are expected to thrive. And
while it’s predicted that the prices of BC’s key export commodities—
lumber, pulp and paper, coal, and copper—will decline throughout
2015, this trend is expected to reverse by the end of the year, with
prices continuing to increase in 2016.4
Natural gas prices are a cause for concern, with prices expected to stay
below US$3.5 per one million British thermal units until at least the
end of 2016 due to an increase in North American inventories. However, on June 12, 2015, Malaysian energy giant Petronas announced
the conditional approval of a liquefied natural gas (LNG) project in
Northwest BC, valued at $34 billion. If it proceeds, this project could
have an enormous impact on the provincial economy.
BC Economics, Provincial Outlook Update, February 6, 2015.
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1
C Stats, Annual BC Origin Exports, May 5, 2015.
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2
D Economics, Provincial Economic Forecasts, April 10, 2015.
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3
D Economics, Commodity Price Report, April 30, 2015.
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histrus42/iStock/Thinkstock
4
14 CPABC in Focus • July/August 2015