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Penticton manufacturers could benefit from loonie's slump
A lower Canadian dollar and a slow recovery in the U.S. and around the world bode well for the B.C. economy in the next two years, a new report from the Business Council of B.C. says.
“The U.S. economy is gaining ground, the Eurozone is out of recession, and Asia, particularly China, continues to expand at a robust clip,” said executive vice president Jock Finlayson as he released the BCBC economic outlook report Tuesday. “The weakening of the Canadian dollar relative to the U.S. dollar will also help lift B.C.’s export of goods and services to the U.S., prompt more U.S. travellers to come to B.C., and serve as a headwind to cross-border shopping.”
Andre Martin, president of the Penticton & Wine Country Chamber of Commerce doesn’t expect these economic conditions to have a large effect on cross border shopping or U.S. tourism locally. Even with the lower dollar, he said, Canadian prices remain higher north of the border.
But Penticton’s manufacturing sector should benefit.
“It bodes well for the manufacturers,” said Martin. Though Penticton’s manufacturing sector took a hit during the economic downturn starting in 2008, Martin sees that as turning around, with local manufacturers on the upswing.
However, he attributes that more to the actions of the businesses themselves, as much as the economic conditions.
“A lot of them have diversified their markets rather than relying on the US,” he said. “They are doing more business at home, too.”
The report forecasts improvement in U.S. demand for lumber and other building materials, wood pulp and even natural gas, which has fallen to historic lows with a surge of shale gas production around North America.
Recovery of the struggling B.C. coastal forest industry was echoed at last week’s Truck Loggers’ Association convention.
The BCBC report holds out hope for a B.C. government that has seen its much-advertised jobs plan fizzle in the past two years.
“Following essentially no net employment growth in 2013, we see the B.C. job market recovering in the coming year,” the report says. “Growing exports, higher non-residential construction outlays and some increase in consumer spending will translate into greater demand for working and more hiring by B.C. businesses.”
The report forecasts that two liquefied natural gas processing plants and pipelines to supply them will begin in 2015.