Northern economy stabilizing following commodity price dip: report

 

Although the short-term outlook for the economy in northern B.C. remains uncertain, economic conditions have largely stabilized following the decline in commodity prices in 2014 that resulted in shutdowns and project delays, according to a report released Tuesday by Northern Development Initiative Trust (NDIT).

The 2017 State of the North economic report provides a snapshot view of the state of the economy for the entire central and northern B.C. region. It is intended to provide community and business leaders with comprehensive sector-specific and regional data that will help shed light on opportunities and inform investment decisions.

“As the North’s economic development organization, it is important that we understand the data behind the decisions that are affecting the communities we serve,” said Evan Saugstad, NDIT chair in a press release. “The State of the North report provides us with the economic context we need to better inform our own decisions, as well as those of our communities, businesses and non-profits, so that together we can build a stronger north.”

Other highlights of the report include:

  • More recent improvements in global commodity prices are supporting increased investment in traditional sectors, notably mining and oil and gas
  • Employment levels remain stable, yet the unemployment rate in the region is higher than the BC average
  • While building permits and housing starts have decreased in recent years, the forecast is for near-term stabilization
  • While the number of business formations has declined below the region’s three-year average, the number of business bankruptcies has remained consistent suggesting that economic conditions have stabilized. The scale of businesses in Northern B.C. remains relatively small, with approximately 75% of business having fewer than 10 employees, and 87% having fewer than 20 employees

“The data is clear that the decline in commodity prices in 2014 had a significant impact on the regional economy,” said Joel McKay, NDIT CEO. “The good news is that the data also shows that economic conditions in the region have stabilized more recently, and major project activity across the region has created opportunities for new investment.”

The report was co-authored by MNP, a national accounting, tax and business consulting firm in Canada.

“The North is very large and geographically diverse, which has a significant influence on economic opportunities,” said Susan Mowbray, senior economic for MNP. “Rather than approaching it as a single entity it is best viewed as a collection of individual regions that are both economically distinct and inter-related. The State of the North report was designed to reflect this and provide meaningful data to support local and regional decision-making.”

The State of the North is designed with an easy-to-read format that includes supporting editorial context around each data set. Until now, region-wide economic data for Northern B.C. has been difficult to find and published in different locations at different times, making it challenging for decision-makers to use data to inform policy making and investment decisions. The State of the North report includes traditional economic indicator information, overviews of core economic sectors such as forestry, agriculture, mining and energy and regional profiles for the Northwest, Northeast, North Central and Cariboo-Chilcotin/Lillooet areas.

The State of the North report has been designed to be a tool that communities, businesses and not-profit organizations can use as they develop and deploy strategies to create jobs, generate new wealth and advance northern communities. The State of the North report is an impartial third-party report with data collection and interpretation provided by MNP. The report follows a similar model to the State of the Island report published annually by the Vancouver Island Economic Alliance.

The report is available in digital format on the Northern Development website. www.northerndevelopment.bc.ca/state-of-the-north