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Study shows jobs down, but forestry poised for upturn CAs see room for optimism as recovery begins to take root
FOR IMMEDIATE RELEASE
June 2, 2010
DUNCAN – A new report by the Chartered Accountants of B.C. indicates the recession and resource downturn had a significant impact on the economy of the Vancouver Island/Coast. The 2010 BC Check-Up, Regional Edition, highlighted job losses, rising unemployment, and social safety net dependency. However, there were some improvements, as capital investment and the number of business establishments increased.
“Not surprisingly, the numbers for 2009 are not overly positive,“ said Woody Hayes, FCA, partner with Hayes Stewart Little & Co. with offices in Duncan, Victoria, and Nanaimo. “Job losses drove up our unemployment rate, and our region’s dependency on the social safety net nearly doubled last year, from 2.6 to 4.4 per cent. However, there is much room for optimism—overall capital investment increased, and the number of business establishments increased.”
The report found that the region lost 14,800 jobs in 2009. Last year’s decline of 3.8 per cent, exceeded the provincial average (-2.4 per cent) and was the third highest in the province. The service sector lost 9,600 jobs, which represented 65 per cent of the Region’s total employment loss.
Most losses in this sector occurred in the Victoria CMA, and the service sector outside Victoria actually gained 400 jobs. New jobs were created in seven out of eleven service industries, including trade (3,300), other services (2,900), information, culture & recreation (2,200), public administration (2,000), finance, insurance, real estate and leasing (1,600), accommodation and food services (1,600), and educational services (1,300). Job losses occurred in health/social assistance (-8,800 jobs), likely reflecting vacancies rather than job cuts, and professional, scientific and technical services (-3,000), and transportation and warehousing (-2,900) due to the downturn in forest products manufacturing and exports.
According to the BC Check-Up, the region’s goods-producing sector also lost 5,200 jobs in 2009. These job losses were primarily felt outside the Victoria CMA, where fewer positions were reported in every industry except agriculture (1,800 job gains). The industries that were hardest hit were construction (-5,700), reflecting last year’s 17.4 per cent drop in building permits, and manufacturing (-1,600), due to lower forest product exports.
On a positive note, the region had the highest increase of business establishments (1.4 per cent) among the development regions. This growth resulted from additional self-employment (508 new businesses) and small businesses with 1 to 19 employees (388 new businesses), which made up for a loss of businesses employing 20 or more employees (51 fewer businesses).
In addition, although the number of new capital projects is down, the total inventory of projects proposed, under construction, or on hold in the region increased to $32.2 billion in December 2009, up from 30.2 billion in 2008. Of this total, the majority, $18.1 billion were located in communities outside the Victoria CMA, and $4 billion worth of those projects are scheduled to begin construction in 2010.
“Thankfully, there are some early signs of a turnaround,” continued Hayes. “Housing sales started climbing in February and dwindling supply has nudged building permits up since November. Higher demand for lumber is forecast due to a predicted modest increase in US housing starts, and growing overseas demand, especially from China. In addition, the implementation of the HST in July will help bolster our resource industries and ensure they maintain their competitive advantage for international exports. However, the recovery will be modest and slow, especially for communities that have been struggling since the resource downturn began in late 2007.”
The Vancouver Island/Coast Development Region (VICDR) encompasses Vancouver
Island and the central coast of the BC mainland from Powell River to Ocean Falls and Bella Coola, and makes up 17.2 per cent of the provincial population.
The BC Check-Up, Regional Edition looks at each region as a place to work, invest, and live. The report is available online at: www.bccheckup.com.
The Institute of Chartered Accountants of British Columbia is the training, governing and regulatory body of B.C.'s 10,000 members and just over 1,500 CA students. The Institute carries out its primary mission to protect the public by enforcing the most demanding admission criteria and the highest professional and ethical standards. Thanks to the quality and rigour of their education and training, CAs are recognized internationally for bringing superior financial expertise, strategic thinking, business insight and leadership to organizations.
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For media inquiries, contact:
Kerri Brkich, Manager of Public Affairs
Institute of Chartered Accountants of BC
Tel: (604) 488-2625
E-mail: brkich@ica.bc.ca
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