Construction generates a lot of buzz, especially when talking about the jobs created by new oil & gas projects. Here, we take a deeper dive into the sector as a follow-on from our recent report, “What’s Fuelling BC’s Economy?”
Are construction jobs the missing link?
In BC, the construction sector – building everything from houses to roadways – is responsible for 7% of our GDP and almost one in ten jobs. It’s also one of our province’s fastest-growing sectors. But how does it break down, and what are some of the factors that keep the construction sector booming?
What fuels construction?
The construction sector is one of the primary drivers of our provincial economy. It’s a $15 billion dollar industry in BC – and over the past decade, has consistently been one of the fastest growing sectors.
So where is this growth coming from? Just over half of the GDP from BC’s construction sector comes from retail and commercial building construction and another 16% comes from repairs. Finally, the remaining 31% is from industrial projects, everything from roadways to hydroelectric dams [source: BC economic accounts – download].
Why does this conversation matter?
In order to decide whether energy development projects should go forward, it’s essential to have a good understanding of where the sector fits into the bigger economic picture. Of course we know that energy is important to Canada, but how important? In what ways? And is it more or less important than other sectors?
Where does our wealth come from?
It’s often said that British Columbia is a resource-based province. In actual fact, the reality is a lot more complex. While it’s true that much of BC was built on natural resources, and that even today sectors like technology and construction have a certain amount of inter-relationships with the resource sector, the basis of our economy has overwhelmingly shifted to service-based industries. More than 4/5 of us work in services and over 76% of our GDP comes from those sectors.
It’s also important to note that a significant part of our economy is based on small businesses. Small businesses make up 98% of all businesses here in BC, more than any other province.
Although economics can be complex and numbers can tell different stories depending on how they’re interpreted, some data speaks for itself. Here’s a chart breaking down the main sources of GDP in British Columbia:
Source: The 2012 British Columbia Economic Accounts, BC Stats
Oil, gas and support services make up just 3% of our GDP, compared to 15% for manufacturing and construction and over 23% for financial and real estate services. When secondary energy services are added into the equation, the total contribution to GDP is still only 11%. While this number is significant, it’s certainly not where most provincial economic activity is coming from.