BC manufucturing down in month, but faring well in bigger picture
Even with the month-to-month sales drop, the industry remains one of the strongest nationally
While the manufacturing slump that has plagued Canada shows signs of waning, British Columbia continues to see drops in manufacturing sales.
However, June’s manufacturing numbers are not an accurate depiction of the strength of the province's manufacturing sector, according to Paul Ferley, assistant chief economist at the Royal Bank of Canada.
“The province underperformed, at least in the month. Now, in the year over year basis, BC outperformed the national numbers,” said Ferley. “I think that’s a slightly better characterisation of what’s happening in terms of BC versus the national economy.”
From May to June, BC saw manufacturing sales fall 0.4 per cent from C$3.9 billion (US$3 billion) to approximately C$3.7 billion (US$2.88 billion). At the same time, Canada saw increases of 0.8 per cent. Even with BC's month-to-month drop, the province's manufacturing industry remains one of the strongest with 1.5 per cent-sales growth since the same period last year. In contrast, Canada as a whole saw a year-to year decrease of almost two per cent. In head-to-head comparisons with other provinces, BC was beat out by Ontario and Saskatchewan, with increases of four per cent and 2.9 per cent year-to-year, respectively.
Canada’s sales growth from May to June was primarily led by Ontario and Alberta. Increases in the two provinces come after onetime events that caused manufacturing sales to dip more then expected during May. According to Brian DePratto, a TD Bank economist, the boost in manufacturing for Alberta was a result of Fort McMurray wildfire recovery and Ontario’s swing resulted from the end of supply-chain disruptions. BC didn’t experience the same market complications as other provinces and as a result did not receive the same bounce-back.
BC's drop comes from weak performance across the province’s key manufacturing sectors, including forestry related industries and mineral products. Low sales volumes in Northern BC’s key industries means the struggling region may be in for more difficult times ahead, says DePratto
“Things like paper and wood related products, that’s one area where you have seen a lot of weakness," said DePratto. “That’s obviously an area that’s going to have a bigger impact on the north.”