Province was beginning to recover from downturn

Our region, like most in B.C., is a varied mix of urban and rural, which is reflected in our industries and activities.

Our region, like most in B.C., is a varied mix of urban and rural, which is reflected in our industries and activities.In the communities outside Greater Victoria, a large percentage of our labour force is still employed in resource industries, and our economy is vulnerable to ongoing, external economic factors.Throughout 2010, B.C. began to recover from the global financial crisis, thanks to increased global export demand and renewed consumer confidence.According to the BC Check-Up, a report released by the Chartered Accountants of B.C., our province’s economy performed well in 2010, and while outlook for 2011 is cautiously optimistic, economic gains continue to be tempered by current and ongoing developments.In 2010, the province recorded employment gains of 1.7 per cent, or 38,600 new positions. Most importantly for the Vancouver Island/Coast region, the forestry and durables manufacturing industries all reported employment gains last year.According to the report, demand for B.C.’s softwood lumber, minerals and coal increased significantly and these trends have continued into 2011, good news for our region’s export base. So far this year, provincial exports of industrial goods have totalled $3.4 billion, up 20 per cent over the first half of 2010. Energy exports hit $4.6 billion, an increase of 17 per cent. Forestry product exports have risen 13 per cent, while softwood lumber has seen an increase of nine per cent.Despite these gains, B.C.’s exports of softwood lumber to the U.S. have not recovered to previously recorded levels and the overall trend is one of decline. The prospect of a renewed recession in the U.S. suggests that exports of lumber to this market will not recover to their former level for some time; third-quarter economic reports for 2011 indicate that the U.S. economy is slowing, and that job growth and housing prices have stalled.In 2010, the province experienced a 1.9-per-cent increase in productivity; however, the defeat of the HST will undoubtedly affect continued productivity growth for our region and B.C. as a whole. As the government moves to reinstate the PST/GST, it is important that they consult with business and create a new and improved PST that could include some of the efficiencies found in value-added taxes.While productivity is one piece of our economic equation, the report also cites the ongoing evolution of B.C.’s product mix and markets, both in the service and goods-producing sectors, as important factors in sustaining economic growth. This focus on diversity will help the Vancouver Island/Coast region in the long term. Reliance on goods-production leaves our region vulnerable to swings in the global commodity price cycle. Expanding markets and new industries will help ensure the continued success of our traditional industries, sustain job creation, and increase our competitiveness.Woody Hayes is a chartered accountant with Hayes Stewart Little & Co in Duncan. The BC Check-Up, is published by the Chartered Accountants of BC, and is available online at www.bccheckup.com.

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