B.C. manufacturing sales remained on a tear to close out the first quarter. Dollar-volume shipments accelerated 4.7% from February and 27% year over year to $5.39 billion. This exceeded the national monthly and year-over-year increases of 3.5% 14.8%.
While a softening of manufacturing at the front end of the pandemic partly contributed year-over-year strength, the improved growth outlook, strong commodity price cycle and elevated housing construction in Canada and the U.S. have lifted activity.
Machinery production increased 39% to $345 million and made up 40% of the monthly gain. While sub-industry data is scant, growth was broad with increases in industrial and general purpose machinery amid strengthening exports and growth prospects as firms invest in capital equipment to meet rising demand and boost productivity.
Forestry sector production continued to rocket higher on strong demand and pricing conditions. Factory shipments rose 3.8% to $1.4 billion and contributed 21% of the overall monthly increase. Year-over-year, sales rose 81% and contributed to more than half the increase.
As anyone building or renovating can imagine, soaring lumber prices continue to drive this gain as production at sawmills was up only 6% from 2020 through 2021’s first two months.
Primary metal manufacturing rose 14% to make up 17% of the monthly increase.
Food manufacturing sales rose 9% from February and 5.4% year over year.
With the latest figures, first-quarter manufacturing sales jumped 23% from 2020, marking the strongest Q1 on record. The robust performance should continue given the positive economic outlook and high commodity prices.
B.C. construction remained steady in March as higher non-residential activity offset a slip in residential. Investment in building construction reached $2.68 billion in March. This marked a 0.4% monthly increase following a decline in February and a 0.7% year-over-year increase.
Residential volumes have risen since mid-2020 in line with increased housing starts and renovations. Non-residential activity looks to have turned a corner after declining through 2020, when businesses focused on survival and adapting through the virtual space, rather than expanding bricks-and-mortar operations. •
Bryan Yu is chief economist at Central 1 Credit Union.
