Vancouver Island’s economy continues to ‘languish’ report says

Economic activity in Vancouver Island/Coast region remains slow despite renewed export demands from the United States

A new report by the Chartered Professional Accountants of BC (CPABC) says economic activity in Vancouver Island/Coast region remains slow despite renewed export demands from the United States

The Regional Check-Up shows annual employment was down 10,200 to 352,000 jobs in 2014, the lowest level recorded in the Vancouver Island/Coast region since 2005. Just over half of these losses occurred outside the Victoria Census Metropolitan Area (CMA).

“There were some gains in the forestry and manufacturing industries, which added a total of 2,600 jobs to the region’s labour market.” said Woody Hayes, a partner with Hayes Stewart Little & Company.  “Higher job numbers in the forestry and wood products manufacturing industries resulted from increased U.S. residential construction demand.

“However these gains are not enough to offset the losses of over 10,200 jobs in the labour market.”

The services sector was responsible for all but 100 of the region’s total job losses. Hardest hit was the business, building and other support services industry, which lost 6,400 jobs.

This is followed by a loss of 2,800 jobs in the accommodation and food services industry, 1,700 jobs in the transportation and warehousing industry, and 1,600 jobs in the trade industry.

Unemployment fell by 0.2 percentage points to 6.1 per cent, but only because workers either left the region to seek job opportunities elsewhere or opted out of the labour force, resulting in a smaller labour pool.

Labour force educational attainment increased to 67.6 percent, likely due to the relocation of those with less than post-secondary accreditation. These factors imply that people living in the region may have gone elsewhere to look for work.

“Outside of the Victoria CMA, the region’s economy looks less optimistic. This is evident by the flow of residents,” Hayes said. “Last year, both Mount Waddington and Central Coast Regional Districts saw a decline in population, while over 80 percent of new residents moved to the southeast coast of Vancouver Island.”

More bad news could be coming. “As more people leave the region to find work elsewhere, it will affect businesses and investments, further slowing the economic recovery in the region,” Hayes concluded.

The report also found:

Population grew by 0.6 percent in Vancouver Island/Coast, a rate well below pre-recession level and less than half the provincial average of 1.1 per cent.

There were 39 business bankruptcies reported in 2014, which is higher than the 23 reports recorded in 2012, but one lower than in 2013.

Investment in non-residential construction declined by 6.8 percent in the Victoria CMA, compared to the provincial average, which declined by only 0.5 per cent.

The Vancouver Island/Coast Development Region encompasses Vancouver Island and the central coast of the B.C. mainland from Powell River to Ocean Falls and Bella Coola. The Development Region makes up approximately 17.2 per cent of the provincial population.