SOURCE: Chartered Professional Accountants of British Columbia

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September 16, 2016 10:12 ET

Slump in Energy Prices Impacted B.C.'s Exports

CPAs Say Marginal Growth in B.C.'s International Exports in 2015

VANCOUVER, BC--(Marketwired - September 16, 2016) - According to the BC Check-Up, an annual publication by the Chartered Professional Accountants of British Columbia (CPABC), B.C.'s exports to international markets increased by a marginal 0.5 per cent to $35.9 billion in 2015.

The increase in export values was largely led by a 17.7 per cent gain in the value of machinery and equipment exports. The principal products in this category were motor vehicles and parts, as well as aircrafts and parts, which shipped primarily to the U.S. market. Increased demand for these products contributed to the gain of 11,100 jobs in B.C.'s manufacturing industry.

Job growth in the manufacturing industry was also led by increased demand for wood products. In 2015, the value of wood product exports from B.C. increased by 4.7 per cent and the value of pulp and paper exports saw a 2.3 per cent increase. Over the past few years, demand for B.C.'s wood and paper products increased, driven by rising demand in the U.S. and China. However, a slowing Chinese economy and competition from lower-cost suppliers, such as Russia, New Zealand, and Brazil could pose a challenge to B.C.'s wood product exports. In addition, there remains uncertainty over the Canada-U.S. Softwood Lumber Agreement. Despite these uncertainties, B.C.'s solid wood products exports reached $4.1 billion in May 2016, compared to $3.5 billion in May 2015.

These gains were offset by a decline in the demand for energy and metallic mineral products. B.C.'s energy exports fell by 25.2 per cent to $5.8 billion in 2015, largely due to a slump in coal and natural gas prices, which offset slight gains in the value of electricity. With continued low energy prices, the value of energy exports is expected to continue to decline through 2016. And as of May 2016, energy exports were at $2.1 billion, or 20.4 per cent less than the value at the end of May 2015.

Quote:

Richard Rees, FCPA, FCA, President and CEO of CPABC:

"After at least four years of gains in the export value of B.C.'s top five commodity products: wood, energy, machinery and equipment, metallic mineral, and pulp and paper products, their value decreased by 3.1 per cent to $28.0 billion in 2015. This was largely due to depressed market conditions for energy and minerals. As a result, B.C.'s value of exports per worker fell by 0.8 per cent to $14,626, indicating a slight deterioration in the economy and investment climate."

Quick Facts on B.C.'s investment climate in 2015:

  • The share of B.C.'s employment in the sciences grew to 7.2 per cent, below the national average of 7.8 per cent. While B.C. is catching up, our comparatively low share of workers in the sciences reflects our province's economic composition, with a heavy reliance on resources, manufacturing, and tourism.
  • Private sector non-residential building investment increased by 2.8 per cent to $3.97 billion. In contrast, Canada as a whole saw a decline of 1.4 per cent to $37.6 billion. Alberta and Ontario also saw a decline in private sector non-residential building investment by 0.8 and 1.1 per cent respectively.
  • B.C.'s net debt rose to $40.7 billion, which led to a slight increase in our government net debt-to-GDP ratio of 0.3 percentage points to 16.7 per cent. Comparatively, the national average government net debt-to-GDP ratio declined by 0.2 percentage points to 31.2 per cent.

Learn more about the BC Check-Up at www.bccheckup.com.

About CPA British Columbia

The Chartered Professional Accountants of British Columbia (CPABC) was formed through the amalgamation of the Institute of Chartered Accountants of BC (ICABC), the Certified General Accountants Association of BC (CGA-BC), and the Certified Management Accountants Society of BC (CMABC). CPABC was officially established when the CPA Act came into effect on June 24, 2015. CPABC represents over 34,000 members and 5,200 CPA students and candidates.

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