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Kootenay Economy Appears To Be Gaining Strength, However Serious Concerns Remain

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According to the 2014 BC-Checkup, a benchmark study of the province’s economy since 1999 by the Chartered Professional Accountants of BC (CPABC , the Kootenay economy appears to gaining strength, however serious concerns remain that raise more questions than answers.

In regards to the Kootenay development region, the report states:

“In its third year of recovery since the recession, the economy of the KDR appears to be gaining strength. The labour market continued to expand in 2013, and the overall employment level surpassed the prerecession high. The KDR achieved the highest rate of job creation in the province, led by service sector growth in trade, transportation and warehousing, and accommodation and food services employment. Likewise, the unemployment rate fell for the third straight year and is now the second lowest in BC. The continued shift towards full-time employment has improved purchasing power for some. Another positive development is the substantial drop in business bankruptcies.

There are, however, still some areas of apparent weakness in the KDR:

–Population loss over the past few years suggests that the region is not an opportune place for all. This outflow may, in part, reflect the shift in labour market demand from goods-producing sector jobs towards service sector employment as individuals relocate to areas where opportunities better match their skills.

-The KDR’s high rate of consumer insolvencies confirms that not all residents have benefitted from labour market improvements.

-Also of concern is the Development Region’s high rate of youth unemployment. The tight job market makes it challenging for young people to remain in the region, and increases the risk of permanent loss of valuable human capital.

-While it is preferable that educational attainment of the KDR’s labour force advances at the same pace as the BC average, attainment levels generally correspond to regional job availability. The KDR labour market does not demand the same level of skills as some jurisdictions in the province.

Looking ahead to 2014, several large projects that have the potential to proceed—the Jumbo Glacier Resort, Teck’s water treatment facilities in Sparwood, the Bingay Main Coal Project, and Phase Two of Teck Coal’s Line Creek Mine—all promise to generate substantial employment and economic benefits in the East Kootenay Regional District. Rising housing starts in the US and demand from China means continued demand for BC lumber. On the supply side, the mountain pine beetle epidemic that has infested much of the wood in the BC interior is threatening the stock of harvestable timber. Interior mill production is slowing as mills scale back or close down.27 The KDR, however, has ample timber supply for its mills and may benefit from soaring prices in the next few years as overall BC production declines. A surplus of coal in world markets combined with slowing growth in China has further reduced coal prices during the first quarter of 2014. Some North American producers have already cut back production and staff. Teck anticipates that production at its coal mines will remain on track this year, but some workforce reductions at its Elk Valley operations are expected as the company is planning to trim its global workforce by 5% to remain competitive.28 It is anticipated that the five East Kootenay operations will remain busy throughout 2014.

However, the most recent seasonally adjusted, short-term trends in labour market indicators are not positive. Employment in the first quarter of 2014 pulled back sharply and is considerably lower than the same period last year. Stats Canada reports that 6,600 jobs were lost (-8.9%) in the KDR between December 2013 and March 2014, pushing the unemployment rate upwards to 7.8%. 29,30 The biggest losses occurred in the construction and trade industries.”

27 Jim Girvan, Murray Hall, Gerry Van Leeuwen, Alice Palmer and Russ Taylor, “BC Mountain Pine Beetle Epidemic: Big Industry Changes Expected by Mid-decade,” Wood Business, Aug 2012.
28 Sygutek, Lisa, “Teck Announces the Layoff of 600 Workers”, Crowsnest Pass Herald, April 23, 2014, Vol. 84 No. 16.
29 Stats Canada, Labour Force Survey Estimates, Employment by Economic Region and North American Industry Classifi cation System, Annual, Table 282-0061.
30 Stats Canada, Labour Force Survey Estimates, by Provinces, Territories and Economic Regions Based on 2006 Census Boundaries, Monthly, Table 282-0054.

2012 Unemployment rate for young workers up by 3.6 ppt to reach 10.4% in Kootenay Region

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Job Creation Sees Second Year of Employment Growth, Lowest Rate of Unemployment Since 2008

According to BC Checkup, in 2012, the unemployment rate for young workers in the Kootenay Region grew by 3.6 ppt to reach 10.4%.

“This was the largest increase in youth unemployment in the province last year. While the increase in minimum wage may have posed a barrier to hiring youth for some employers, the KDR has seen a substantial decline in its youth population in the past two years (-23%),[15] due to changing demographics and an outflow of young people.”

Table 1-3: Youth (age 19 to 24 years) Unemployment Rate, Kootenay Development Region, 2007 to 2012

Unemployment Rate, Kootenay Development Region, 2007 to 2012

*Unemployment rate calculated by author.
”Despite its poor performance last year, KDR’s youth unemployment rate remained below the provincial average and placed third amongst the Development Regions, sitting behind the Northeast (7.3%) and the Vancouver Island/Coast (10.2%). In 2012, youth unemployment was the highest in the Cariboo (14%) and Northwest BC (11.1%).”

Unemployment Rate

The unemployment rate captures the balance of labour force supply and demand. In 2012, approximately 2,100 KDR residents entered the labor market to take advantage of new job opportunities. Nevertheless, job creation (2,700) outpaced labour force expansion, driving the regional unemployment rate down by 0.9 percentage points (ppt) to 7.3%. This was the region’s lowest rate of unemployment since 2008.

All of BC’s Development Regions, except Northwest BC, saw a drop in the unemployment rate last year, with the largest declines occurring in the Vancouver Island/Coast (-1.7 ppt), the Thompson-Okanagan (-1 ppt) and the Kootenays (-0.9 ppt).

The KDR’s unemployment rate remains one of the highest in the province, however, exceeded only by the Northwest BC (10.7%). The lowest rates were recorded in the Northeast (4.1%), Vancouver Island/Coast (6.%) and the Mainland/Southwest (6.8%).

Table 1-2: Unemployment Rate, Kootenay Development Region, 2007 to 2012

Unemployment Rate, Kootenay Development Region, 2007 to 2012
Source: Statistics Canada

Job Creation

In 2012, the KDR marked its second year of employment growth, a sign of overall improved economic health. Although annual employment is still shy of its pre-recession peak (2007), the addition of 2,700 new jobs resulted in the third highest rate of job creation (3.7%) in the province. Growth in the services-producing sector (2,300 new jobs) outpaced a slight gain in the KDR’s goods-producing industries (300 new jobs). Additional signs of strength in the economy are the large number of workers (4,800) that moved into full-time employment.

Employment in the KDR’s services-producing sector surged in 2012, reaching its highest level in more than a decade. Industries that contributed to this gain were educational services (2,400 new jobs), and professional, scientific and technical services (1,300 new jobs). Detailed statistics reveal that growth in educational employment is primarily due to the addition of workers at primary and secondary institutions.[6] While employment within KDR’s school districts did increase modestly between 2011 and 2012,[7] it was not to the magnitude suggested by Labour Force Survey data.[8] Employment in the professional, scientific and technical services intensified during the summer months; this was largely due to the substantial mineral exploration activity that took place and the seasonal demand for post-secondary students in computer-related, engineering and technical fields. Other noteworthy service sector employment gains were in trade (700 new jobs), health care and social assistance (600 new jobs), and other services (500 new jobs).

The largest service sector job losses were reported in business, building and other support services (-1,100); these are sectors where many workers are either self-employed or hired on a temporary seasonal basis.[9] Employment in finance, insurance, real estate and leasing also dropped (-1,000). This sector has been losing workers since mid-2011. Other service-sector industries that reported substantial job losses were transportation and warehousing (-700), and accommodation and food services (-500). Province-wide, the trucking industry has been plagued with a shortage of drivers, mechanics, dispatchers, and operations staff. In the KDR, the shortage of truck drivers is so extreme that some companies are looking overseas for new hires.[10]

The reported job losses in some sectors can be partially explained by the amalgamation of part-time jobs into full-time positions, and labour movement between industries, as regional work opportunities expand. The consolidation, purchasing, and selling of businesses, in a number of industries, also resulted in job loss. Employers are also grappling with worker shortages due to both retirements and a difficulty in matching worker skill sets.

Table 1-1: Employment, Kootenay Development Region, 2007 to 2012[11]

Employment, Kootenay Development Region, 2007 to 2012
Source: Statistics Canada, Labour Force Survey Historical Review

Compared to most parts of BC, a high concentration of the KDR’s labour force is employed in the goods-producing sector.[12] Employment in this sector dwindled through most of 2012, but a slight rally towards the end of the year pushed annual employment ahead of that recorded in 2011. Solid gains in the primary industries (1,700 new jobs), such as agriculture, oil and gas extraction, logging and forestry, and mining, offset losses suffered by other industries in the sector. Mining was responsible for all of last year’s gain, thanks to a growth in exploration and extraction activity.[13] In contrast, the KDR’s other primary industry, logging, lost workers last year.

The weakest link in the goods sector was the manufacturing industry, which lost 1,200 workers in 2012. The industry, which has seen its workforce reduced by 41% since 2007, has been unable to regain its footing since the recession. However, monthly job creation statistics show a slight positive trend, with the industry adding workers in the last quarter of 2012, as KDR mills geared up to meet rising lumber demand.

A substantial dip in construction employment towards the end of 2012 pushed the sector’s annual total down by 500 jobs. Detailed data reveals that there were approximately 3,000 less workers[14] employed in construction during the last quarter of 2012 compared to the same period in 2011. The overall dollar value of building permits in the KDR has diminished in previous years, and this job loss is likely a reflection of some of the larger projects shedding workers as they wind down.

In 2012, all of BC’s Development Regions reported job creation except for Northwest BC, which reported a 9.2% loss. The Northeast posted the largest growth (6.7%), followed by the Cariboo (4.9%), and the Kootenays (3.7%).

Footnotes

  1. BC Stats, Employment and Unemployment Rate by Detailed Industry, April 2013.
  2. BC Ministry of Education, Teacher Statistics, January 2013.
  3. Statistics Canada’s estimates of employment by industry are derived from sample surveys and users are cautioned that while the reliability of the survey is adequate at the provincial level, margin of error increases in smaller sub-groups.
  4. Ministry of Advanced Education and Labour Market Development and BC Stats, A Guide to the BC Economy, 2010 Edition.
  5. Castlegar News, “Plenty of Job Opportunities in Trucking Industry”, November 16, 2012.
  6. Industries with “-“are estimated to have less than 1,500 employed at that particular point in time, thus the numbers presented in the table may not add up to total sector figures, and job creation statistics can not be calculated.
  7. 29% KDR workers are employed in the goods-sector vs. 20% at provincial level. Source: Statistics Canada, Labour Force Survey Historical Review, 2013.
  8. BC Stats, Employment and Unemployment Rate by Detailed Industry, April 2013.
  9. Given the considerable variance in monthly employment from 2011, there may be some error with this estimate due to sampling variability and the estimation process—regardless, the data does show a downward trend.
  10. Statistics Canada, Labour Force Survey Custom Tabulation.

2012 Unemployment rate for young workers up by 3.6 ppt to reach 10.4% in Kootenay Region

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Job Creation Sees Second Year of Employment Growth, Lowest Rate of Unemployment Since 2008

According to BC Checkup, in 2012, the unemployment rate for young workers in the Kootenay Region grew by 3.6 ppt to reach 10.4%.

“This was the largest increase in youth unemployment in the province last year. While the increase in minimum wage may have posed a barrier to hiring youth for some employers, the KDR has seen a substantial decline in its youth population in the past two years (-23%),[15] due to changing demographics and an outflow of young people.”

Table 1-3: Youth (age 19 to 24 years) Unemployment Rate, Kootenay Development Region, 2007 to 2012

Unemployment Rate, Kootenay Development Region, 2007 to 2012

*Unemployment rate calculated by author.
”Despite its poor performance last year, KDR’s youth unemployment rate remained below the provincial average and placed third amongst the Development Regions, sitting behind the Northeast (7.3%) and the Vancouver Island/Coast (10.2%). In 2012, youth unemployment was the highest in the Cariboo (14%) and Northwest BC (11.1%).”

Unemployment Rate

The unemployment rate captures the balance of labour force supply and demand. In 2012, approximately 2,100 KDR residents entered the labor market to take advantage of new job opportunities. Nevertheless, job creation (2,700) outpaced labour force expansion, driving the regional unemployment rate down by 0.9 percentage points (ppt) to 7.3%. This was the region’s lowest rate of unemployment since 2008.

All of BC’s Development Regions, except Northwest BC, saw a drop in the unemployment rate last year, with the largest declines occurring in the Vancouver Island/Coast (-1.7 ppt), the Thompson-Okanagan (-1 ppt) and the Kootenays (-0.9 ppt).

The KDR’s unemployment rate remains one of the highest in the province, however, exceeded only by the Northwest BC (10.7%). The lowest rates were recorded in the Northeast (4.1%), Vancouver Island/Coast (6.%) and the Mainland/Southwest (6.8%).

Table 1-2: Unemployment Rate, Kootenay Development Region, 2007 to 2012

Unemployment Rate, Kootenay Development Region, 2007 to 2012
Source: Statistics Canada

Job Creation

In 2012, the KDR marked its second year of employment growth, a sign of overall improved economic health. Although annual employment is still shy of its pre-recession peak (2007), the addition of 2,700 new jobs resulted in the third highest rate of job creation (3.7%) in the province. Growth in the services-producing sector (2,300 new jobs) outpaced a slight gain in the KDR’s goods-producing industries (300 new jobs). Additional signs of strength in the economy are the large number of workers (4,800) that moved into full-time employment.

Employment in the KDR’s services-producing sector surged in 2012, reaching its highest level in more than a decade. Industries that contributed to this gain were educational services (2,400 new jobs), and professional, scientific and technical services (1,300 new jobs). Detailed statistics reveal that growth in educational employment is primarily due to the addition of workers at primary and secondary institutions.[6] While employment within KDR’s school districts did increase modestly between 2011 and 2012,[7] it was not to the magnitude suggested by Labour Force Survey data.[8] Employment in the professional, scientific and technical services intensified during the summer months; this was largely due to the substantial mineral exploration activity that took place and the seasonal demand for post-secondary students in computer-related, engineering and technical fields. Other noteworthy service sector employment gains were in trade (700 new jobs), health care and social assistance (600 new jobs), and other services (500 new jobs).

The largest service sector job losses were reported in business, building and other support services (-1,100); these are sectors where many workers are either self-employed or hired on a temporary seasonal basis.[9] Employment in finance, insurance, real estate and leasing also dropped (-1,000). This sector has been losing workers since mid-2011. Other service-sector industries that reported substantial job losses were transportation and warehousing (-700), and accommodation and food services (-500). Province-wide, the trucking industry has been plagued with a shortage of drivers, mechanics, dispatchers, and operations staff. In the KDR, the shortage of truck drivers is so extreme that some companies are looking overseas for new hires.[10]

The reported job losses in some sectors can be partially explained by the amalgamation of part-time jobs into full-time positions, and labour movement between industries, as regional work opportunities expand. The consolidation, purchasing, and selling of businesses, in a number of industries, also resulted in job loss. Employers are also grappling with worker shortages due to both retirements and a difficulty in matching worker skill sets.

Table 1-1: Employment, Kootenay Development Region, 2007 to 2012[11]

Employment, Kootenay Development Region, 2007 to 2012
Source: Statistics Canada, Labour Force Survey Historical Review

Compared to most parts of BC, a high concentration of the KDR’s labour force is employed in the goods-producing sector.[12] Employment in this sector dwindled through most of 2012, but a slight rally towards the end of the year pushed annual employment ahead of that recorded in 2011. Solid gains in the primary industries (1,700 new jobs), such as agriculture, oil and gas extraction, logging and forestry, and mining, offset losses suffered by other industries in the sector. Mining was responsible for all of last year’s gain, thanks to a growth in exploration and extraction activity.[13] In contrast, the KDR’s other primary industry, logging, lost workers last year.

The weakest link in the goods sector was the manufacturing industry, which lost 1,200 workers in 2012. The industry, which has seen its workforce reduced by 41% since 2007, has been unable to regain its footing since the recession. However, monthly job creation statistics show a slight positive trend, with the industry adding workers in the last quarter of 2012, as KDR mills geared up to meet rising lumber demand.

A substantial dip in construction employment towards the end of 2012 pushed the sector’s annual total down by 500 jobs. Detailed data reveals that there were approximately 3,000 less workers[14] employed in construction during the last quarter of 2012 compared to the same period in 2011. The overall dollar value of building permits in the KDR has diminished in previous years, and this job loss is likely a reflection of some of the larger projects shedding workers as they wind down.

In 2012, all of BC’s Development Regions reported job creation except for Northwest BC, which reported a 9.2% loss. The Northeast posted the largest growth (6.7%), followed by the Cariboo (4.9%), and the Kootenays (3.7%).

2012 Unemployment rate for young workers up by 3.6 ppt to reach 10.4% in Kootenay Region

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Job Creation Sees Second Year of Employment Growth, Lowest Rate of Unemployment Since 2008

 

According to BC Checkup, in 2012, the unemployment rate for young workers in the Kootenay Region grew by 3.6 ppt to reach 10.4%.

“This was the largest increase in youth unemployment in the province last year. While the increase in minimum wage may have posed a barrier to hiring youth for some employers, the KDR has seen a substantial decline in its youth population in the past two years (-23%),[15] due to changing demographics and an outflow of young people.”

Table 1-3: Youth (age 19 to 24 years) Unemployment Rate, Kootenay Development Region, 2007 to 2012

Unemployment Rate, Kootenay Development Region, 2007 to 2012

*Unemployment rate calculated by author.
”Despite its poor performance last year, KDR’s youth unemployment rate remained below the provincial average and placed third amongst the Development Regions, sitting behind the Northeast (7.3%) and the Vancouver Island/Coast (10.2%). In 2012, youth unemployment was the highest in the Cariboo (14%) and Northwest BC (11.1%).”

Unemployment Rate

The unemployment rate captures the balance of labour force supply and demand. In 2012, approximately 2,100 KDR residents entered the labor market to take advantage of new job opportunities. Nevertheless, job creation (2,700) outpaced labour force expansion, driving the regional unemployment rate down by 0.9 percentage points (ppt) to 7.3%. This was the region’s lowest rate of unemployment since 2008.

All of BC’s Development Regions, except Northwest BC, saw a drop in the unemployment rate last year, with the largest declines occurring in the Vancouver Island/Coast (-1.7 ppt), the Thompson-Okanagan (-1 ppt) and the Kootenays (-0.9 ppt).

The KDR’s unemployment rate remains one of the highest in the province, however, exceeded only by the Northwest BC (10.7%). The lowest rates were recorded in the Northeast (4.1%), Vancouver Island/Coast (6.%) and the Mainland/Southwest (6.8%).

Table 1-2: Unemployment Rate, Kootenay Development Region, 2007 to 2012

Unemployment Rate, Kootenay Development Region, 2007 to 2012
Source: Statistics Canada

Job Creation

In 2012, the KDR marked its second year of employment growth, a sign of overall improved economic health. Although annual employment is still shy of its pre-recession peak (2007), the addition of 2,700 new jobs resulted in the third highest rate of job creation (3.7%) in the province. Growth in the services-producing sector (2,300 new jobs) outpaced a slight gain in the KDR’s goods-producing industries (300 new jobs). Additional signs of strength in the economy are the large number of workers (4,800) that moved into full-time employment.

Employment in the KDR’s services-producing sector surged in 2012, reaching its highest level in more than a decade. Industries that contributed to this gain were educational services (2,400 new jobs), and professional, scientific and technical services (1,300 new jobs). Detailed statistics reveal that growth in educational employment is primarily due to the addition of workers at primary and secondary institutions.[6] While employment within KDR’s school districts did increase modestly between 2011 and 2012,[7] it was not to the magnitude suggested by Labour Force Survey data.[8] Employment in the professional, scientific and technical services intensified during the summer months; this was largely due to the substantial mineral exploration activity that took place and the seasonal demand for post-secondary students in computer-related, engineering and technical fields. Other noteworthy service sector employment gains were in trade (700 new jobs), health care and social assistance (600 new jobs), and other services (500 new jobs).

The largest service sector job losses were reported in business, building and other support services (-1,100); these are sectors where many workers are either self-employed or hired on a temporary seasonal basis.[9] Employment in finance, insurance, real estate and leasing also dropped (-1,000). This sector has been losing workers since mid-2011. Other service-sector industries that reported substantial job losses were transportation and warehousing (-700), and accommodation and food services (-500). Province-wide, the trucking industry has been plagued with a shortage of drivers, mechanics, dispatchers, and operations staff. In the KDR, the shortage of truck drivers is so extreme that some companies are looking overseas for new hires.[10]

The reported job losses in some sectors can be partially explained by the amalgamation of part-time jobs into full-time positions, and labour movement between industries, as regional work opportunities expand. The consolidation, purchasing, and selling of businesses, in a number of industries, also resulted in job loss. Employers are also grappling with worker shortages due to both retirements and a difficulty in matching worker skill sets.

Table 1-1: Employment, Kootenay Development Region, 2007 to 2012[11]

Employment, Kootenay Development Region, 2007 to 2012
Source: Statistics Canada, Labour Force Survey Historical Review

Compared to most parts of BC, a high concentration of the KDR’s labour force is employed in the goods-producing sector.[12] Employment in this sector dwindled through most of 2012, but a slight rally towards the end of the year pushed annual employment ahead of that recorded in 2011. Solid gains in the primary industries (1,700 new jobs), such as agriculture, oil and gas extraction, logging and forestry, and mining, offset losses suffered by other industries in the sector. Mining was responsible for all of last year’s gain, thanks to a growth in exploration and extraction activity.[13] In contrast, the KDR’s other primary industry, logging, lost workers last year.

The weakest link in the goods sector was the manufacturing industry, which lost 1,200 workers in 2012. The industry, which has seen its workforce reduced by 41% since 2007, has been unable to regain its footing since the recession. However, monthly job creation statistics show a slight positive trend, with the industry adding workers in the last quarter of 2012, as KDR mills geared up to meet rising lumber demand.

A substantial dip in construction employment towards the end of 2012 pushed the sector’s annual total down by 500 jobs. Detailed data reveals that there were approximately 3,000 less workers[14] employed in construction during the last quarter of 2012 compared to the same period in 2011. The overall dollar value of building permits in the KDR has diminished in previous years, and this job loss is likely a reflection of some of the larger projects shedding workers as they wind down.

In 2012, all of BC’s Development Regions reported job creation except for Northwest BC, which reported a 9.2% loss. The Northeast posted the largest growth (6.7%), followed by the Cariboo (4.9%), and the Kootenays (3.7%).