British Columbia international merchandise trade ricocheted higher in October following recent declines.
Exports accelerated with a year-over-year increase of 35.5% compared with a 34.7% gain in September. Seasonally adjusted, export volumes increased 8.7% over the previous month, although levels were still 2.4% below the high seen in June 2021. Import volumes continue to reach new highs, up 0.8% over the previous month and 29% year over year.
Export gains were led by resource sectors. Metallic and non-metallic mineral products sales rose 32.6% (seasonally adjusted) over the previous month and 15% year over year. Meanwhile, energy exports rose about 23% from September and a whopping 142% from a year ago, bolstered by higher natural gas prices and higher coal volume and prices. The industrial machinery, equipment and parts sector added to headline gains with a 6.8% increase from September.
Forestry exports have fallen back to earth after surging through the first half of the year as lumber prices retreated by nearly 40% after peaking in May. This marked a return to about December price levels, albeit still 40% higher than pre-pandemic February 2020. Prices have since rebounded amid B.C. transportation challenges.
On the imports side, metal ores and non-metallic minerals increased 103% and the energy sector rose by 50% over the previous month. Broadly, resource imports are sharply higher than a year ago. Higher transport costs, supply chain disruption and increased commodity prices are contributing to increased prices.
Through 10 months, imports rose 22% from the previous year, with all sectors showing increases, and export volumes rose 36.8%. While the global economy continues to recover, trade will likely deteriorate this month due to the devastating floods that affected the agricultural industry and transport linkages. The Omicron variant is also a negative risk.
Perched on the back of government investment, B.C. building permits surged in October to their highest level since March. Permits reached $1.72 billion, marking a 15% increase from September and a 32% increase from a year ago.
Non-residential activity drove growth with an 81% increase from September to $628.2 million. While ending downward momentum, this was a one-off gain associated with a hospital replacement in Terrace. •
Bryan Yu is chief economist at Central 1 Credit Union.
