BC economic snapshot for March 2, 2013

Posted by Rumin Mann
March 11th, 2013

Private and public-sector organizations in B.C. look like they are going to play it safe this year by holding capital investments level following slow economic growth and subdued corporate profit gains in 2012.

According to Statistics Canada’s annual survey of investment intentions, anticipated current-dollar investment in construction, machinery and equipment across all sectors is about $46.9 billion for 2013. This would mark a 0.9 per cent increase from 2012, but would be one of the weakest gains since 2000 and a far cry from last year’s 6.8 per cent uptick.

B.C.’s expected decline is consistent with the direction of Canadian aggregate intentions, which fell to 1.7 per cent from a gain of more than 7 per cent in 2012, but anticipated growth in B.C. was fourth lowest among Canadian provinces.

While overall intentions are subdued, outlooks differ sharply among industries. Weak commodity prices have weighed sharply on expansionary plans for B.C. resource industries. Investment intentions for 2013 in the mining and oil and gas sector, slumped more than 25 per cent ($2.3 billion) from 2012, while plans in the utilities sector fell 5 per cent ($200 million).

In contrast, capital investment plans surged in manufacturing by nearly $1 billion or 50 per cent, as companies plan to invest heavily in wood products, food and transport-related products. Gains are also expected in transportation and warehousing, which saw a 28 per cent gain ($650 million) in intentions over 2012 levels. Housing is also expected to be a positive driver with residential investment rising 3.6 per cent from 2012.

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