B.C. export momentum slowed in December but still posted a blockbuster year for international sales in 2021.
Full-year exports rose 36 per cent to a record $53.9 billion, smashing the previous high of $48 billion in 2018.
While monthly patterns have bounced around with a particularly noteworthy surge followed by a retrenchment in the forestry sector, resources-oriented industries led 2021 gains. Specifically, energy exports, which captures to a large extent natural gas, electricity and coal rose 76 per cent. Forestry products rose 42 per cent. Annual imports rose 22 per cent to $65.5 billion, reflecting double-digit gains observed in most product segments, although growth was slower in consumer goods imports (up 12.8 per cent).
Increased international trade has reflected a combination of stronger demand during the pandemic recovery but also inflationary pressures flowing through prices for both input costs and finished production.
On the export front, the bulk of the resources-related gain reflects prices rather than real shipments. Granular data on energy exports for 2021 show B.C. natural gas exports of 77 per cent with real shipment volume up 5.5 per cent. Coal exports rose 70 per cent but were unchanged in shipments. On the forestry front, softwood lumber shipment data showed a 63 per cent increase in dollar-volume exports and three per cent increase real activity.
The key takeaway is that the contribution to GDP growth from the surge in exports was likely closer to five per cent, with most of the incredibly strong dollar-volume gain owing to higher prices.
B.C. building permits fell 2.7 per cent in December to a seasonally adjusted $1.86 billion after three months of robust gains. A rebound in non-residential activity was insufficient to offset residential declines. That said, total permits exceeded December 2020 levels by 23.2 per cent.
Total residential permits fell 14 per cent from November but were still 28 per cent higher than a year ago. Lower total permits were led by falling multi-family residential construction permits (20.3 per cent) in December. Intentions fell back after strong prior-month performances in Metro Vancouver and Victoria. Abbotsford-Mission and Kelowna, which reported declines in residential permits the previous month, rebounded.
Non-residential permits continued its see-saw pattern again in December with permits up 45 per cent to a robust $535.4 million. •
Bryan Yu is chief economist at Central 1 Credit Union.
