September’s uptick in B.C. international exports didn’t last. Goods exports slumped again, with total exports at $3.38 billion in October. This marked a near 13% decline from same-month 2018.
Seasonally adjusted, exports dropped nearly 5% from October, following a prior-month gain of 3%. October’s pullback was broad-based across most product segments.
The latest numbers extend the downward trend in exports and highlight a glaring weakness in this year’s provincial economic performance. Year-to-date exports declined 5.9% through 2019’s first 10 months. That said, weakness has been concentrated in the forest product sector (down 19%), which is facing an industry crisis. Lumber price declines and high input costs have caused more than a handful of mill closures, cuts in shifts and layoffs in the harvesting sector. Metal and non-metallic mineral product shipments were down 25%, pointing to effects of the soft global economy. Non-resource exports are up 4.5%, suggesting a low Canadian dollar is providing support for other sectors.
The temperature is rising in the Lower Mainland housing market with seller’s-market conditions emerging in apartments and townhomes. Total Multiple Listing Service (MLS) sales in the combined Metro Vancouver and Abbotsford-Mission area rose 48% in November from same-month 2018, up 3,822 units. Seasonally adjusted, sales rose 4% from October and have surged since a spring trough by more than 75% but are still below levels observed before imposition of the mortgage stress test.
While federal and provincial policy measures continue to constrain demand, improved affordability via mortgage rates, lower home values and tight labour markets is lifting buying activity.
Sales are rising across home types, but relative strength remains strongest in the apartment and townhome segments. Detached-home sales are still half of market peaks observed in early 2016 at the height of the up cycle in the market. Improved affordability is driving higher demand for condominiums.
The broad sales-to-active-listings ratio at 22% points to a balanced to seller’s market, but masks soft conditions in the detached market. In contrast, at 30% ratios are in seller’s markets in the apartment and townhome sector, pointing to further growth in home values in 2020.
The average price in November reached $908,950, up 1.3% from October, albeit still 3% below a year ago. The benchmark value, which adjusts for housing attributes, was unchanged from October at $939,600 but rose for a fourth month, pointing to positive momentum. •
Bryan Yu is deputy chief economist at Central 1 Credit Union.