Export Detail

Topic Box from the 2009 Ninth Annual Benchmark Report

Weak export growth as seen in Performance Indicator 3 can be attributed to international commodity exports, and more specifically, to a decline in forestry product shipments. Strength in other commodities, shipments to other provinces and service exports have softened, but not offset, the relative decline.

Weak International Goods Exports
Exports, as presented in performance indicator three, can be broken down into exports to other provinces and to other countries. It can be further separated into services and goods.

Total real per capita exports from BC grew by more than 50 percent between 1991 and 2008. Unfortunately for its relative rank, exports grew by more in every other province. The province with the next lowest growth, Alberta, beat BC by over 25 percentage points and six provinces had triple digit growth.

British Columbia's export performance is driven by weak international goods exports. Between 1981 and 2008, BC earned the following ranks (for growth in real per capital exports): tenth for international services; tenth for international goods; ninth for interprovincial services; and, third for interprovincial goods.

Export performance is dominated by international goods because they have accounted for as much as 59 and at least 47 percent of total exports since 1981 and performance here has generally been weak.

Real per capita exports of goods from BC to other countries grew by one-third between 1981 and 2008, which earned a tenth-place rank. Ninth ranked Newfoundland and Labrador saw exports more than double. Fifth-ranked Ontario tripled its international goods exports and those in top ranked Prince Edward Island were more than four fold higher in 2008 than in 1981.

Some aspects of BC's performance do look promising however. Goods exports to other provinces earned strong ranks in the 1980s and 1990s. Service exports, combined international and interprovincial, were relatively weak through the 1980s and 1990s but have been relatively strong this decade.

International Export of Goods by Commodity
Weak international exports are driven by ongoing troubles in lumber and newsprint and, more recently, pulp. Table 1 and Figure 2 show strong lumber exports through most of the 1990s and a significant decline since 1999.

BC Commodity Exports

Pulp and paper exports are essentially the same as in 1990 while most of the rest of BC's major commodity exports have expanded to three or four times their 1990 values.

Wood products and pulp and paper accounted for over 50 percent of commodity exports in 1990 but now represent only 30 percent, roughly the same share as energy.

Lumber
BC averaged exports of 2.2 million cubic metres of lumber per month in the 1990s (see Figure 3) and 2.5 million between 2000 and 2006. Monthly lumber exports averaged 2.4 million cubic metres in 2007 but only 1.8 million in 2008 and are on track to be lower for 2009.

Average monthly income from lumber sales was $525 million in the 1990s as well as between 2000 and 2006 but fell to $400 million in 2007, to $300 million in 2008 and looks to be even lower for 2009.

Pulp
BC averaged exports of 400 thousand metric tonnes of pulp per month in the 1990s and through to 2007 (see Figure 4). Monthly pulp exports averaged 330 thousand metric tonnes in 2008 and are on track to be lower for 2009. Average monthly income from pulp sales was roughly $260 million in the 1990s and between 2000 and 2006 and increased to $282 million in 2007 but fell to $240 million in 2008 and look to be even lower for 2009.

Newsprint
BC averaged exports of 127 thousand metric tonnes of newsprint per month in the 1990s but only 80 thousand metric tonnes between 2000 and 2006 (see Figure 5). Monthly newsprint exports averaged 56 thousand metric tonnes in 2007, 40 thousand metric tonnes in 2008 and are on track to be lower for 2009.

Average monthly income from newsprint sales was approximately $90 million in the 1990s; $58 million between 2000 and 2006; $36 million in 2007; and $29 million in 2008. Sales look even weaker for 2009.

In contrast, volumes and values for coal exports and natural gas exports are generally higher in the current decade than in the 1990s.

Coal
BC averaged exports of 1.8 million metric tonnes of coal per month in the 1990s (see Figure 6) and 1.9 million between 2000 and 2006. Monthly coal exports were up to an average of 2.1 million metric tonnes in 2007 and 2008 and are on track to be slightly lower for 2009.

Average monthly income from coal sales was $125 million in the 1990s and $155 million between 2000 and 2006 but increased to $206 million in 2007 and to $448 million in 2008. Average monthly income from coal sales in 2009 is shaping up to be lower than 2008 but higher than 2007.

Natural Gas
BC averaged exports of 641 million cubic metres of natural gas per month in the 1990s (see Figure 7) and 952 million between 2000 and 2006. Monthly natural gas exports were up to an average of 864 million cubic metres in 2007 and 2008 and are on track to be close to a billion for 2009.

Average monthly income from natural gas sales was $52 million in the 1990s but averaged $240 million between 2000 and 2008. Average monthly income from natural gas sales in 2009 are on track to be lower than averages for most of the decade.

International Export of Goods by Destination
BC exported roughly 70 percent of its commodity exports to the US in the early part of this decade. The share fell to 53 percent in 2008 and will be lower still when 2009 data are finalized.

In contrast, export shares to China have tripled since 2000 to six percent and those to Korea have doubled, also to six percent. BC's export shares to Pacific Rim countries deteriorated to a low of 21 percent in 2001 but at one-third in 2008, it is rapidly approaching the 38 percent seen in 1990. When exports to the US recover, these shares will likely decrease.

Summary
Weakness in BC's export sector is mainly due to a decline in shipments of lumber and pulp and paper to international markets. Although its share of exports is well below that seen in the 1990s, the forestry industry still generates three of every ten dollars in export income in BC.

BC has seen strong growth in other commodities, particularly energy and machinery and equipment. Service exports in general and goods exports to other countries have seen better growth than goods exports to other countries. Exports to China have also continued to expand. These effects have softened the impact of forestry's recent weakness but have not offset it.

The share of export income from shipping forestry products abroad means BC will not see strong export growth in the near term until it starts to sell more timber and pulp again, preferably at higher prices. This depends on a turnaround in the United States.