By Jock Finlayson

Amid a weak global economy and an extended downturn in many commodity markets, the B.C. economy has held up surprisingly well. Two decades ago, a worldwide mining/energy slump would have delivered a punishing blow to the province. No longer.

The Business Council estimates that B.C.’s economy expanded by 2.6 per cent (after inflation) in 2015, with growth expected to reach 2.8 per cent this year. These are not barn-burning figures, but to put them in a larger context, Canada will be lucky to see annual economic growth of 1.5 per cent over the two-year period 2015-16.

An important factor contributing to B.C.’s economic resilience is greater diversification in industrial structure, as well as in the distribution of employment across the economy.

A Measure of B.C.’s Fastest Growing Industries
Business Council researchers recently looked at which B.C. industries have posted the strongest growth since the late 1990s. In our study, growth was measured as the change in real gross domestic product (GDP) by industry.  Real GDP by industry can be thought of as the economic “value-added” generated from business activity in the various sectors that comprise the province’s economy.

The accompanying table shows the average annual increase in real GDP between 1997 and 2014 for each of the 25 fastest-growing B.C. industries.

Technology and Environment Hot Sectors
As expected, several high-technology industries are in the top third of growth sectors.  Software has seen the most impressive expansion of any industry in B.C. Computer system design services is another hot sector, along with the design and technical services industry. Reflecting the continued improvement of environmental practices, the waste management and remediation industry has been a consistent growth leader.

Contrary to what some may have predicted, a number of natural resource and manufacturing industries also feature on the list.

Since we are looking at growth over almost two decades (and not just the past few years), oil and gas extraction scores in the top 10, with the related oil and gas pipeline industry also reporting a solid gain in output. Higher-value wood products also show up, in two industry segments: plywood and other panel products, and pallets, millwork and other containers. As for non-resource manufacturing, computers and related equipment, pharmaceutical and medical products, furniture, and “miscellaneous” manufacturing all appear in the top 25.

Bigger Trade Picture Impacts
The impact of Asia’s global rise, and of deeper trade linkages within North America, is evident in sustained increases in Gateway-related economic activity, via the railway industry, the truck transportation sector, and warehousing, storage and logistics.

The value of output in B.C.’s aquaculture industry has risen at an annual rate of 5.2 per cent since 1997. Film production has had ups and downs, but over the long term its economic footprint has also grown. A handful of other service industries appear in the top 25, including equipment and machinery repair, investigation and security services, gambling, courier and messaging services, and language, technical and trades training schools. The outsized economic contributions of real estate development in British Columbia are reflected in the above average growth of real GDP in the residential construction sector.

Economic Strengths New and Old
Our study reveals that, over the past two decades, B.C.’s fastest growing industries have been drawn from a range of sectors. The top 25 group attests  to the diversity of the province’s economy. While advanced technology, and a cross-section of domestically-focused service industries have performed well, it is worth noting that the manufacturing, natural resources and transportation sectors are also represented on the list.

Jock Finlayson is executive vice-president and chief policy officer with the Business Council of BC.

(PeopleTalk Summer 2016)