Last week was a light one for ÎÚÑ»´«Ã½ economic data, ahead of labour market and early housing market data set to be released this week. The key data published this past week was national industry output or GDP, which came in above expectations at growth of 0.2 per cent month to month. This points to a better-than-expected annualized growth rate of two per cent for the second quarter of this year.
While this national performance partially aligns with ÎÚÑ»´«Ã½—as it should—the provincial economic structure does differ, and national indicators provide limited guidance. The province has consistently outperformed the national average both during and before the pandemic period, driven largely by large-scale investments specific to the region. Growth can and does differ.
That said, some industry data provides an indication of sector developments, including forestry and hospitality. Resources remain a critical component of ÎÚÑ»´«Ã½’s economy and its goods exports. On the forestry front, real Canadian output pointed to a flat performance in May. Forestry and logging output rose by 0.6 per cent and wood manufacturing gained 1.7 per cent from the previous month. Year over year, forestry and logging were down 5.3 per cent, while wood product manufacturing increased by 10 per cent over the last 12 months. Firms may be seeing some signs of improved productive capacity. Nationally, wood product manufacturing was range-bound through the pandemic despite a recent uptick, while forestry and logging continues to trend lower. Year to date, the former rose by 3.2 per cent, with forestry and logging were down 6.9 per cent.
This mixed picture is observable in ÎÚÑ»´«Ã½, where the province may be underperforming other provinces. Softwood lumber exports were down 1.3 per cent through five months, while dollar-value sales increased by 2.4 per cent. Meanwhile, the dollar value of raw log exports fell 5.6 per cent. Manufacturing sales volume was unchanged from a year ago. It is likely that ÎÚÑ»´«Ã½’s forestry sector has underperformed the Canadian patterns given a series of sawmill closures this year.
On the hospitality front, accommodation and food services were key drivers of national growth in May, with a real monthly gain of 0.9 per cent. However, the year-to-date increase remains modest at one per cent. Restaurants drove the increase, with a 1.2-per-cent month-over-month gain and a 1.8-per-cent year-to-date increase, while hotels saw a decline in output. Hockey contributed significantly to the national growth picture, and ÎÚÑ»´«Ã½ likely experienced a modest boost given a meaningful Canucks run this year, although this may have detracted from spending in other areas. A scan of restaurant receipts in ÎÚÑ»´«Ã½ pointed to an uptick in May of 0.8 per cent with year-over-year growth above five per cent. Tourism has also fully recovered from the pandemic.
The finance and insurance sectors were up by 0.2 per cent in May. This growth included a 0.1-per-cent rise in credit intermediation and 0.9 per cent growth in financial investment services. However, these gains were partially offset by a 0.2-per-cent decline in increase carrier activities. This sector has been growing steadily in the past three years, with growth spread across all the subsectors.
The real estate and rental leasing sector experienced a 0.1-per-cent rebound in May, recovering from a decline in April. Growth was primarily driven by real estate services, while rental and leasing services saw a 0.6-per-cent decrease during the same period. Despite these monthly fluctuations, both subsectors have shown a positive trend since November 2023.
Bryan Yu is chief economist at Central 1.
