CRANBROOK, BC–(Marketwired – June 07, 2017) – The resource sector was a key contributor to the Kootenays’ economy in 2016, as coal prices recovered and lumber demand increased. According to the CPABC Regional Check-Up, an annual economic report by the Chartered Professional Accountants of British Columbia (CPABC), these factors helped the region weather an otherwise challenging year.
“Our region is very sensitive to global commodity price trends, so it was a welcome relief to see prices recover for some of our key resources last year. In particular, the sharp rebound in steelmaking coal prices had a positive impact in the East Kootenay area,” said Mike Calder, CPA, CA, partner at BDO Canada LLP in Cranbrook. “The forestry sector also showed strength in 2016. U.S. demand for softwood lumber increased lumber production in B.C.’s Southern Interior Forest Region by 3.5 per cent.”
The other industry that experienced growth in 2016 was tourism. The region offers numerous year-round tourism activities, ranging from downhill and Nordic skiing, golf, backcountry hiking, biking, snowmobiling, and camping. A weak Canadian dollar and favourable weather conditions attracted both Canadian and international visitors to the region. Room revenue for the first seven months of 2016 increased.
“However, despite strength in some areas of our economy, our region lost 1,600 jobs in 2016. This drove the overall employment level to a 12-year low of 67,400 jobs. Our service sector suffered the brunt of the damage,” continued Calder. “The number of jobs in the trade industry contracted by 32 per cent, or 3,600 positions. Much of this reduction occurred at the retail level in the latter half of 2016, with employment in this industry hitting a low in October.”
Looking at the first quarter of 2017, the region’s labour market rebounded with employment increasing by 11.1 per cent from the 2016 average. As a result, this helped to bring down the region’s unemployment rate to 6.4 per cent by the end of March. Most of these jobs were created in the accommodation and food services, trade, forestry, mining, and manufacturing industries.
“Initial indications do suggest a better year ahead for our region. Teck, which produces steelmaking coal and other materials, predicts that coal production will be close to 2016 volumes, and permits have been approved to begin mining in new areas to extend mine life and increase production. Several major projects are also expected to begin construction, the largest of which is a $370 million open pit coal mine near Sparwood,” said Calder. “However, uncertainty lingers over the fate of our forestry industry. Although the federal government has introduced a financial package to help the softwood lumber industry, the U.S. tariff and NAFTA renegotiations will likely impact the demand for our region’s softwood lumber and other forestry products.”
About CPABC Regional Check-Up — Kootenay:
The Kootenay Development Region is comprised of three Regional Districts: the Kootenay-Boundary, Central Kootenay, and East Kootenay. It accounts for nearly 3.1 per cent of the provincial population.
The CPABC Regional Check-Up reports look at British Columbia’s eight Development Regions as a place to work, invest, and live. The reports are available online at: www.bccheckup.com.
About CPA British Columbia
The Chartered Professional Accountants of British Columbia (CPABC) is the training, governing, and regulatory body for almost 35,000 CPA members and 5,000 CPA students. CPABC carries out its primary mission to protect the public by enforcing the highest professional and ethical standards and contributing to the advancement of public policy. CPAs are recognized internationally for bringing superior financial expertise, strategic thinking, business insight, and leadership to organizations.
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